Companies will have to divest 11 generic injectable drugs as a condition of approving the deal
Regulators in the US have put conditions on the proposed US$1.6bn acquisition of Strides Arcolab's unit Agila Specialties by US generic and speciality pharmaceutical company Mylan. In August, the Indian Prime Minister's office, the Foreign Investment Promotion Board and the Cabinet Committee on Economic Affairs in India had approved the deal without conditions.
However, the US Federal Trade Commission (FTC) has said that the companies will have to divest 11 generic injectable drugs as a condition of approving the deal. Mylan has consented to the terms, which will be subject to public comment for 30 days, after which the FTC can decide to make the order final. According to the FTC, in each of these 11 markets, Mylan and Agila are two of only a limited number of current or likely future competitors.
The FTC has said that the number of suppliers in generic pharmaceutical markets is important because prices generally decrease as the number of competing generic suppliers increases, and the 11 generic injectable drugs are highly susceptible to supply disruptions caused by the inherent difficulties of producing sterile liquid drugs.
The FTC has alleged that by reducing the number of competitors in these markets, the acquisition as originally proposed would eliminate important competition and could lead to higher prices.
Among the assets to be divested are Amiodarone hydrochloride injection, an antiarrythmia heart drug used to treat patients with frequently recurring ventricular fibrillation or unstable ventricular tachycardia; Etomidate injection, an anesthetic used during surgery; Fluorouracil injection, which is used to treat several types of cancer, including breast and pancreatic; Mesna injection, a detoxifying agent used to prevent urinary tract damage caused by a particular chemotherapy drug; and Methotrexate sodium preservative-free injection, which is used to treat several types of pediatric cancers, as well as certain autoimmune disorders.
In February, Pennsylvania-based Mylan had agreed to buy Agila, the injectable drugs unit of Bangalore-based Strides Arcolab, to expand its presence in the fast-growing generic injectables market. The deal came seven years after Mylan paid $736m in cash to buy out Hyderabad-based Matrix Laboratories, a leading producer of active pharmaceutical ingredients.
Agila, formerly Strides Specialties, was spun off as a separate division following a restructuring in 2009, and is a wholly owned subsidiary of Strides Arcolab. It focuses on key therapeutic areas like anti-infectives, oncology, CNS, GI, ophthalmics and peptides.
Agila has a global pipeline of approximately 350 filings pending approval, including 122 Abbreviated New Drug Applications (ANDAs) awiting FDA approval. The company currently produces products across nine manufacturing facilities in India, Brazil and Poland, eight of which have been approved by the FDA.
Mylan had said that Agila's capabilities complemented its existing injectables platform of more than 500 products marketed globally, including 55 ANDAs, and its sterile manufacturing facilities in Ireland and India.
Mylan is one of the world's leading generics and speciality pharmaceutical companies and sells its products in approximately 150 countries. The company posted a net profit of $536m in 2012 on revenues of $6.1bn.