Happy Thanksgiving for GSK with FTC approval of Novartis vaccine biz

By Dan Stanton

- Last updated on GMT

FTC headquarters in Washington DC
FTC headquarters in Washington DC

Related tags Influenza vaccine Investment

Just in time for the holidays, GSK can ‘give thanks’ to the US Federal Trade Commission (FTC) which has approved the $7bn acquisition of Novartis’ vaccine business.

The FTC voted yesterday in support of GlaxoSmithKline acquiring the vaccine business of fellow Big Pharma Novartis for up to $7bn (€5.6bn) as part of a three-part transaction originally announced in April​.

The deal does not include Novartis’ flu vaccines which were divested last month​, with CSL Limited picking up the business and three manufacturing sites in North Carolina, UK and Germany for $275m.

Novartis is still awaiting the nod for its proposed $16bn purchase of GSK’s oncology pipeline but the FTC was favourable to the third part of the exchange yesterday, agreeing to the creation of a consumer healthcare GSK-led joint venture between the two pharma companies providing Novartis divests its nicotine replacement therapy (NRT) transdermal patch business.

“Potential competitors would find it difficult, expensive, and time-consuming to develop new patch products and secure FDA approval, reinforcing the substantial competitive concerns,”​ the FTC said in a statement, adding the agency “requires Novartis to divest Habitrol, as well as its private-label patch business to India-based Dr. Reddy’s.”

Despite initial concerns that GSK had the better end of the three-way deal, Joe Jiminez, CEO of Novartis, said these divestments – along with the proposed sale of its animal health division to Eli Lilly – would give the Swiss Pharma Giant a competitive advantage over the next few years.

By concentrating on three brands - pharma, eyecare and generics (including biosimilars) – Novartis would be equipped for future trends, including a growing aging population and the increasing demands on healthcare spending, he told delegates at the FT Global Pharmaceutical and Biotechnology Conference 2014​ in London last week.

“By divesting these businesses we can create more value across our major sectors, leveraging the synergies of the three businesses,”​ he said.

In related news, the FTC also agreed yesterday to the $43bn megamerger of medical device firms Medtronic and Covidien, on the proviso that Medtronic divests its drug-coated balloon catheter business to Spectranetics, a firm that manufactures and markets a range of devices to treat peripheral and coronary arterial disease.

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