Lupin to divest two Gavis drugs for deal approval

Lupin to divest two Gavis drugs for deal approval

 Lupin, India’s third-largest drugmaker by sales, has decided to sell two generic drugs sold by Gavis Pharmaceuticals to G&W Laboratories to complete the hurdles for its acquisition of Gavis Pharmaceuticals, states the US Federal Trade Commission (FTC).

Without a divestiture, the merger would have combined two of only four companies that currently market generic doxycycline monohydrate capsules in two dosage strengths, used to treat bacterial infections, likely resulting in higher prices.

The merger would have also  eliminated one of the few companies likely to enter the market for generic mesalamine extended release capsules, used to treat ulcerative colitis, in the near future, thereby delaying beneficial competition and the prospect of price decreases, said the FTC.

Lupin had decided to acquire Gavis Pharmaceuticals last year in a deal valued at $850 million.

Under the terms of the proposed order, Lupin is required to transfer to G&W Laboratories all of Gavis’s rights and assets related to generic doxycycline monohydrate capsules no later than ten days after the acquisition is consummated, so that G&W can begin selling the product immediately.

The transfer includes Gavis’s manufacturing technology, which Lupin will help G&W set up at the latter’s facilities. In the interim, Lupin will supply G&W with the finished product for two years.

The proposed order also requires that Gavis divest its rights and assets related to generic mesalamine capsules to G&W before the acquisition takes place. Gavis’s CEO will provide consulting services to help G&W complete the required regulatory work and begin manufacturing the product.

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