EC OKs Pfizer’s Acquisition of Hospira Pending Select Divestments
The European Commission (EC) has approved Pfizer’s proposed $17 billion acquisition of the specialty pharmaceutical company, Hospira, The EC decision includes Pfizer's commitment to divest certain assets.
The EC approval is conditional on Pfizer divesting certain sterile injectable drugs, as well as its infliximab biosimilar drug, which is currently under development. The EC said it had “concerns that the merged entity would have faced insufficient competitive pressure from the remaining players in the corresponding markets, with a risk of price rises and discontinuation of the development of Pfizer’s infliximab biosimilar drug. The commitments offered by the companies address these by removing the overlap between Pfizer and Hospira in all the markets where the Commission identified competition concerns.”
Infliximab is the active ingredient in Johnson & Johnson’s Remicade, a drug used o treat autoimmune diseases such as rheumatoid arthritis and Crohn’s disease. In its ruling, the EC noted that one biosimilar has been approved for use in the European Economic Area (EEA) (developed by Celltrion but co-marketed by Hospira and Celltrion), and that two companies have biosimilars in advanced stages of development (Samsung Bioepis and Pfizer). The EC said it had competition concerns for infliximab drugs because following the merger with Hospira, Pfizer would be likely to either: delay or discontinue development of its biosimilar drug in order to focus on Hospira’s marketed product, leading to the net loss of future competition by one of only three differentiated biosimilars in advanced stages of development (Hospira/Celltrion’s, Samsung Bioepis’ and Pfizer’s) or hand back Hospira’s product to its developer Celltrion, leading to the loss of current price competition between Hospira and Celltrion.
The EC also noted competition concerns for sterile injectables for certain products in some European Union member states: namely carboplatin in Belgium; cytarabine in Belgium, Italy, Portugal, and Sweden; epirubicin in Austria, Belgium, Italy, the Netherlands, and Spain; irinotecan in Belgium, the Czech Republic, and Italy; vancomycin in Ireland and voriconazole in the EEA as a whole).
To address these competition concerns, Pfizer submitted a set of commitments and following a review and has agreed to the following: (1) full divestment of the development, manufacturing and marketing rights of its infliximab biosimilar drug currently under development (including appropriate intellectual property, technology and know-how), with marketing rights outside the EEA remaining with the merging entity and (2) divestment of marketing authorizations and associated rights of Pfizer or Hospira in relation to certain sterile injectables relevant in specified EU countries.
“We are pleased to have achieved a significant milestone for Pfizer's pending acquisition of Hospira with the EC's approval of the transaction,” said Ian Read, chairman and chief executive officer, Pfizer, in a company statement. “We continue to work cooperatively with the regulatory agencies to obtain the requisite approvals, and continue to expect the transaction to close in the second half of 2015.”
Completion of the transaction remains subject to the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, governmental and regulatory approvals in certain other jurisdictions and other usual and customary closing conditions.