FTC preliminary approval for Hikma buy of Custopharm, but with divestment

The US Federal Trade Commission on Tuesday said it required – as a condition of London-listed Jordanian drugmaker Hikma Pharmaceuticals’ (LSE: HIK) $375 million acquisition of Custopharm announced in September last year – that Custopharm’s parent company retain and transfer Custopharm’s assets related to the corticosteroid drug triamcinolone acetonide, or TCA, to another subsidiary, Long Grove Pharmaceuticals.

The consent agreement preserves competition in the market for generic TCA by removing any incentive for Hikma to terminate or delay the marketing of the TCA product in its own development pipeline. Historically, the entry of additional generic pharmaceutical competitors has led to lower prices for patients. Further, the consent agreement requires Long Grove to maintain the competitive viability of the retained TCA assets going forward and requires Hikma to seek Commission approval for future acquisitions related to TCA.

“Hikma’s acquisition of Custopharm’s TCA business could have caused significant harm for patients who use TCA to treat severe skin conditions, allergies, and inflammation,” said Holly Vedova, Director of the FTC’s Bureau of Competition, adding: “Only three competitors now market this drug. The FDA recently approved marketing of Custopharm’s TCA product, while Hikma has an injectable TCA product in development. The FTC’s action ensures that Hikma still has the incentive to bring its TCA product to market, which will benefit consumers.”