AbbVie, Allergan To Divest Three Drugs to AstraZeneca and Nestlé

As part of the ongoing regulatory approval process for AbbVie’s pending $63-billion acquisition of Allergan, Allergan has agreed to divest three drugs: one investigational drug to AstraZeneca and two commercial products to Nestlé. AbbVie has also extended the expiration period for exchange offers for Allergan notes from January 31, 2020 to February 28, 2020.

With regard to the divestments, AstraZeneca has agreed to acquire global development and commercial rights for Allergan’s brazikumab, an investigational IL-23 inhibitor in Phase IIb/III development for treating Crohn’s disease and in Phase II development for treating ulcerative colitis. AstraZeneca and Allergan will terminate their existing license agreement, and all rights to brazikumab will revert to AstraZeneca. The transaction is expected to be completed in the first quarter of 2020, subject to regulatory approvals associated with AbbVie’s proposed acquisition of Allergan and its completion.

Under the termination agreement, Allergan will fund up to an agreed amount, estimated to be the total costs expected to be incurred by AstraZeneca until completion of the development for brazikumab for Crohn’s disease and ulcerative colitis, including the development of a companion diagnostic. As part of a 2012 collaboration between Amgen and AstraZeneca to jointly develop and commercialize a clinical-stage inflammation portfolio, Amgen is entitled to receive a high single-digit to low double-digit royalty on sales of brazikumab if approved and launched. This includes the original inventor royalty. Other than this, AstraZeneca will own all rights and benefits arising from the product with no other payments due to Amgen.

Additionally, Nestlé has agreed to acquire and take full operational ownership of Allergan’s Zenpep (pancrelipase), a gastrointestinal medication. The drug is available in the United States for treating exocrine pancreatic insufficiency due to cystic fibrosis and other conditions. Zenpep’s 2018 net sales were $237 million. The deal is expected to be finalized concurrent with the merger of Allergan and AbbVie. Nestlé will take ownership of Zenpep upon closing of the merger transaction, with customary transition support from Allergan. Nestlé also will be acquiring Allergan’s Viokace (pancrelipase), another pancreatic enzyme preparation, as part of the same transaction.

The closings of the divestitures of brazikumab and Zenpep are contingent upon receipt of US Federal Trade Commission and European Commission approval, the closing of AbbVie’s pending acquisition of Allergan, and the satisfaction of other customary closing conditions. On January 10, 2020, AbbVie and Allergan received conditional approval of their merger by the European Commission, subject to the approved divestiture of brazikumab and other conditions.

AbbVie and Allergan continue to expect a first-quarter 2020 close of their pending transaction, subject to receipt of required regulatory approvals and other closing conditions. As part of that process, AbbVie has extended the expiration period for exchange offers for Allergan notes from January 31, 2020 to February 28, 2020.

Source: AbbVie (divestments), AbbVie (extension of expiration period), Allergan, AstraZeneca, Nestlé

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