With the final hurdle for their $ 63 billion merger cleared in the EU, AbbVie and Allergan were in the home stretch to close the deal. Then the novel coronavirus took off, and now that merger could be further out of reach as regulatory bodies prepare to pump the brakes.
AbbVie and Allergan’s pending merger may face a regulatory delay after the Federal Trade Commission (FTC) and the U.S. Department of Justice’s (DOJ’s) antitrust division warned they may need additional time to review due to disruptions from COVID-19, Bloomberg reported Tuesday.
While the FTC said in a statement that its operations are running “without interruption,” the commission told Bloomberg that the two drugmakers could have issues producing documents and making employees available for review.
The DOJ is also considering delays to its own reviews and criminal investigations, Bloomberg reported, but the department didn’t specify its reasons.
Spokespeople for the FTC and DOJ couldn’t be reached by press time.
Earlier this month, AbbVie and Allergan cleared their final regulatory hurdle in the EU for the merger after offloading gastrointestinal candidate brazikumab in a deal with AstraZeneca.
The merger itself is pending a final close, but AbbVie said the sale approval would “clear the pathway” to wrap up the transaction. The merger is also pending approval by the Irish High Court, AbbVie said. Thanks to a “timing agreement” between the EU and FTC, AbbVie predicted an FTC decision by April.
But the novel coronavirus pandemic and the rising COVID-19 infection counts have potentially put that final review off indefinitely and past the legally allowed time, Bloomberg reported. Companies are given 30 days to approve or challenge an FTC decision on a merger, potentially putting AbbVie and Allergan under the gun as drugmakers worldwide are sending employees to work remotely.
Even without COVID-19, AbbVie and Allergan had a difficult road to approval with extra FTC hurdles and consumer pushback.
In September, the FTC issued a “second request” for information on the deal within weeks of union and consumer groups complaining the merger would give AbbVie a competitive edge.
The deal would likely make AbbVie the fourth-largest drugmaker in the world by bringing on drugs such as blockbuster Botox as well as fast-growing antipsychotic Vraylar to join AbbVie’s own prospective blockbusters including Skyrizi and Rinvoq.