Teva disclosed Tuesday in a filing with the US Securities and Exchange Commission that completing the planned $40.5-billion purchase of Allergan's global generics business "could take as long as June." The Israeli drugmaker, which previously expected the deal to close as early as the end of the first quarter, said "significant progress" had been made toward completion and that the anticipated delay was based on its current estimate of time needed to gain clearance from the US Federal Trade Commission (FTC). Teva recently received European clearance for the transaction, subject to certain divestitures.
Analysts at Sanford C. Bernstein noted that Teva is likely discussing potential divestitures with the FTC, including pipeline products. Specifically, the analysts indicated that the FTC is awaiting input from the FDA, adding "this process is taking some time." Moreover, they suggested the FDA is likely requesting rather extensive divestitures, with Teva choosing to pursue further negotiations that could go on for three weeks to five weeks. "The impact of the divestitures will likely be more material than previously believed," Sanford C. Bernstein analysts explained.
The analysts also stated that the negotiations could delay completion of Allergan's merger agreement with Pfizer. A prior report indicated that completion of the merger was dependent on Teva's proposed acquisition of Allergan's generics business. For related analysis, see ViewPoints: Allergan impresses, but investors remain cautious towards Pfizer deal.
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