FTC’s Take On Two Pharma Mergers Shows Deals Can Clear Higher Hurdle

The US Federal Trade Commission has indicated that biopharma mergers would have a tougher time clearing the agency. But it’s decision not to intervene in Pfizer Inc.’s $6.7bn acquisition of Arena Pharmaceuticals, Inc. and its requirement for a single pipeline product divestiture as a condition of Hikma Pharmaceuticals plc’s acquisition of Custopharm, Inc. show that such deals can go through despite the agency’s closer scrutiny and consideration of broader anticompetitive factors.

Some analysts had questioned if Pfizer’s deal with Arena would be accepted by the FTC given Pfizer’s substantial presence in immunology and inflammation. Arena’s etrasimod, in development across a range of immuno-inflammatory conditions, was at the heart of the deal. Pfizer argued that the drug is complementary to its current portfolio and not overlapping, and that the deal would bring a differentiated mechanism of action to market