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Bristol-Myers Squibb, Celgene likely to face longer US antitrust probe

By Jenna Ebersole

Published on March 18, 2019 in Issue 957

Bristol-Myers Squibb’s plan to buy Celgene likely faces an extended US antitrust investigation, given the impact of the partial federal government shutdown and size of the deal. But a longer review doesn't necessarily point to problems.

Bristol pulled its antitrust filing on the merger in February with plans to refile it Feb. 20, setting up a second 30-day initial review period set to expire March 22. Instead, it's reasonable to expect the Federal Trade Commission to issue a second request for more information extending the review.

The company said it made the decision “to facilitate continued dialogue” with the commission.

Merging parties typically pull and refile paperwork either in an attempt to gain more time to satisfy all questions and avert a second request, or to narrow the focus of an anticipated second request before it's issued.

The exact motivation in this case wasn't clear, but with the shutdown and number of on-the-market and pipeline drugs the agency will need to consider — as well as the political attention in a large pharmaceutical case — the companies may not be able to avoid a second request.

Bristol and Celgene announced the massive $74 billion deal in early January, near the beginning of the month-long shutdown, hindering their ability to hold early conversations with enforcers on the deal. Sometimes, merging parties are able to begin addressing antitrust concerns before filing merger paperwork.

Instead, the antitrust agencies had only a skeleton crew working on mergers with a deadline where absent action, the deal could close. Bristol and Celgene filed their antitrust paperwork Jan. 16, in the midst of the shutdown, and were affected by it, MLex has learned.

The merger is expected to face a standard antitrust analysis that examines competition on a drug-by-drug basis but shouldn't pose a major threat. In the aftermath of the shutdown, the agency may have gotten a slower start than usual on that review.

Even if a second request is issued next week, that doesn't mean the companies face major roadblocks in the approval of their deal. The FTC may investigate and find that even on drugs that appear to overlap, there is sufficient competition in the space, or divestiture is possible.

One issue that could catch the attention of the commission is a Celgene pipeline drug that may be seen as a competitor to Bristol's drug Opdivo. Celgene is developing the drug in partnership with China’s BeiGene.

Bruce Hoffman, director of the FTC’s Bureau of Competition, last year said pipeline divestitures in certain complex pharmaceutical mergers will no longer be accepted because of a history of problems with divestitures in the space.

His view could complicate the companies’ ability to resolve potential concerns. But Hoffman’s comments may have been directed more to the generic space, it is understood, and it isn’t clear the FTC will see a problem with the drug.

Additionally, in its agreement with BeiGene, Celgene agreed to certain terms to remedy any issues arising from a potential acquisition by a company with competing products.

For now, the FTC is likely near the beginning of its analysis.

The above article appeared on MLex on March 13. For more details about MLex, including getting access to its exclusive content, please contact sales@mlex.com.