Teva wins US regulatory approval for $6.8-bn Cephalon acquisition

Generic drugmaker Teva Pharmaceutical Industries Ltd has gained US antitrust approval for its $6.8-billion acquisition of Cephalon Inc after it agreed to divest its rights to generic versions of sleep disorder medicine Provigil and two other drugs in order to preserve competition.

Teva has now agreed to supply competing generic drug maker Par Pharmaceuticals for one year its Provigil drug, which is used to combat drowsiness, and divest its generic cancer pain drug Actiq, and a muscle relaxant, known chemically as cyclobenzaprine hydrochloride within 10 days of the acquisition.

The two drugs had annual sales of $298 million in the US, according to IMS Health data. Generic formulations of Actiq are currently sold in the US by Teva, Cephalon, Watson Pharmaceuticals and Covidien Plc, according to the FTC. Actiq and its generic version generate annual revenue of $173 million in the US, while Amrix, which yet does not have generic versions, generates $125 million in sales.

Teva's acquisition of Frazer, Pennsylvania-based Cephalon would have given the company more than 80 per cent of the market, the Federal Trade Commission's (FTC) bureau of competition said.

Teva yesterday said that it expects to close the Cephalon acquisition by 14 October, subject to approval from the European Commission, which is likely to give its ruling by 13 October.

"This settlement preserves competitive markets for current generic drugs, which are key to holding down the cost of health care for consumers," said Richard Feinstein, director at the FTC. "It also ensures there will be competition among generic drugs introduced in the future."