Allergan is selling off an experimental drug and a commercialized product in order to allay antitrust concerns from regulators reviewing the company’s $63 billion acquisition by AbbVie.
The rights to brazikumab, which is currently in testing for Crohn’s disease and ulcerative colitis, will go to AstraZeneca (NYSE: AZN), where the antibody drug was initially developed. In 2016, Allergan (NYSE: AGN) paid AstraZeneca $250 million up front for global rights to develop and commercialize the drug.
Nestlé is acquiring the rights to Allergan digestive drug pancrelipase (Zenpep). The capsules were developed to treat exocrine pancreatic insufficiency, a condition in which the pancrease does not produce enough digestive enzymes, resulting in the inability to properly digest food. The drug generated $237.7 million in sales in 2018, virtually all of it coming from the US. Nestlé is also acquiring Viokace, another pancreatic enzyme preparation.
Financial terms for the AstraZeneca and Nestlé deals were not disclosed. Both transactions will close when North Chicago, IL-based AbbVie (NYSE: ABBV) receives regulatory approval to complete its acquisition of Allergan, based in Dublin, Ireland. That deal is currently being reviewed by the US Federal Trade Commission and the European Commission.
Earlier this month, the European Commission granted conditional approval of the acquisition, pending the sale of brazikumab. The drug blocks interleukin-23 (IL-23), an inflammatory molecule that has become a target for some autoimmune disease therapies. But AbbVie’s portfolio already includes IL-23 inhibitor risankizumab (Skyrizi). That drug, approved last year as a treatment for moderate-to-severe plaque psoriasis, is being positioned as a successor to blockbuster AbbVie drug adalimumab (Humira). The commission concluded that brazikumab’s development would stall under AbbVie, leading to “a loss of innovation for [inflammatory bowel disease] treatments, as AbbVie would not continue developing Allergan’s IL-23 inhibitor,” the agency wrote.
AbbVie’s acquisition of Allergan is intended to diversify the company’s portfolio beyond adalimumab, which makes up most of its revenue but is losing patent protection. Meanwhile, Allergan’s biggest division is its Specialized Therapeutics unit, which includes aesthetic products such as botox. While that business has been growing, accounting for 43.8 percent of the company’s $15.7 billion in 2018 sales, revenue in its general medicine business has been slipping, according to Allergan’s 2018 annual report.
AbbVie is already making plans to bring the Allergan aesthetic products into the fold. Earlier this month, it announced the formation of a new business unit, Allergan Aesthetics, that will house botox, the dermal filler Juvederm, and the body-contouring product Coolsculpting.