Akorn's $640-mn merger with Hi-Tech Pharmacal gets conditional approval
15 Apr 2014
US Generic drugmaker Akorn Enterprises Inc yesterday received US regulatory approval for its proposed $640 million acquisition of rival Hi-Tech Pharmacal Inc on condition that it sells some drugs.
The Federal Trade Commission (FTC) said that Akorn and Hi-Tech Pharmacal will sell the rights and assets to three generic prescription eye medications and two generic topical anesthetics to Watson Laboratories, now Actavis Plc.
The FTC said that Akorn's proposed acquisition of Hi-Tech would be anti-competitive and lead to higher prices for consumers.
Among the products to be sold by Akorn and Hi-Tech Pharmacal are:
- Ciloxan drops, which are used to treat bacterial eye infections and corneal ulcers., as the proposed merger would reduce the number of competitors to just three in this already highly concentrated market
- Quixin drops, which are eye drops used to treat bacterial eye infections sine the merger would leave only two competitors from three
- Generic Xylocaine jelly, a topical anesthetic prescription drug, as the merger would reduce the number of current competitors from three to two
- Generic EMLA cream, a topical anesthetic prescription drug, which would leave only three competitors, and give the merged firm more than 70 per cent of the US market
- Generic Ilotycin ointment, prescribed for bacterial eye infections, which is currently sold by three firms in the US and Hi-Tech is poised to enter the market in the near future
''Akorn's acquisition of Hi-Tech, therefore, would deprive consumers of the benefits of future competition that would come with Hi-Tech's entry into this highly concentrated market,'' said the FTC.
Last August, Akorn, a generic pharmaceutical company, agreed to acquire Hi-Tech Pharmacal, a specialty pharmaceutical company, for $640 million in cash or $43.50 per share.
Hi-Tech develops generic and branded prescription and over-the-counter (OTC) products. It specialises in difficult to manufacture liquid and semi-solid dosage forms and produces and markets a range of oral solutions and suspensions, as well as topical ointments and creams, nasal sprays, otics, sterile ophthalmics and sterile ointment and gels products.
The deal will allow Akorn to expand its eye medication portfolio to oral liquids and ointments.