US antitrust body OKs Teva's acquisition of Cephalon, but with divestments

Israel-based Teva Pharmaceutical Industries (Nasdaq: TEVA) says that the US Federal Trade Commission has accepted the proposed consent order in connection with the pending $6.8 billion acquisition of US biotech firm Cephalon (Nasdaq: CEPH) by Teva, which outbid Canada’s Valeant Pharmaceuticals for the company (The Pharma Letter March 3), and granted early termination of the Hart Scott Rodino waiting period.

However, to protect competition in the market for prescription drugs, the FTC will require Teva, the world’s largest generic drugmaker, to sell the rights and assets related to a copy cancer pain drug and a generic muscle relaxant. In addition, the proposed settlement requires Teva to enter into a supply agreement that will allow a competing firm to sell a generic version of Cephalon’s wakefulness drug Provigil (modafinil) - which had branded US sales of around $1.1 billion - in 2012.

Teva is required to divest two Abbreviated New Drug Applications for fentanyl citrate lozenges, a generic version of Actiq, and cyclobenzaprine ER capsules, the generic version of Amrix. According to IMS Health data, annual sales in the USA for Actiq and the equivalent generic products are $173 million, while US brand sales for Amrix are around $125 million. The parties expect to close the transaction by October 14, 2011 subject to approval by the European Commission.