U.S. removes roadblock to Actavis-Warner Chilcott deal

WASHINGTON Fri Sep 27, 2013 3:02pm EDT

WASHINGTON (Reuters) - Federal regulators on Friday removed a roadblock to drugmaker Actavis Inc's purchase of Warner Chilcott Plc after Actavis agreed to sell all rights and assets related to three oral contraceptives and an osteoporosis treatment.

The Federal Trade Commission said it settled charges that the $8.5 billion deal would be anticompetitive because of the companies' stranglehold on certain drugs.

As part of the proposed settlement, Actavis agreed to sell all rights and assets related to generic Femcon FE, Loestrin 24 FE and its generic equivalents, and Lo Loestrin FE and its generic equivalents, all contraceptives; and the osteoporosis treatment Atelvia and its generic equivalents.

The commission said Actavis and Warner Chilcott are the only significant manufacturers of generic Femcon FE, a chewable oral contraceptive tablet that contains progestin and estrogen.

Without a remedy, the proposed deal would have eliminated competition between them in the market for the drug, and "the reduction in the number of suppliers likely would have a direct and substantial effect on pricing," the FTC said.

Warner Chilcott sells the branded drugs Loestrin 24 FE, Lo Loestrin FE and Atelvia, but no company currently sells generic versions. According to the FTC complaint, Actavis is likely to be the first generic supplier to compete with Warner Chilcott's branded versions of those drugs.

"The merged firm would have the ability to delay the entry of Actavis' generic product in each of these markets," the commission said.

The FTC's proposed consent agreement is subject to public comment through October 28.

Shareholders of the two companies approved Actavis' proposed purchase earlier this month. The companies have said the deal is expected to close early in the fourth quarter.

Actavis shares were at $144.69, up 1.4 percent, and Warner Chilcott shares were at $23.17, up 1.4 percent, in afternoon trading.

(Reporting by Ros Krasny; Editing by Gerald E. McCormick and John Wallace)

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