Sun Pharma and Ranbaxy merger gets US nod

pharmafile | February 2, 2015 | News story | Manufacturing and Production, Sales and Marketing India, Ranbaxy, Sun Pharma, US, generics, merger, recall, torrent 

The US Federal Trade Commission has given its approval for Sun Pharma’s $4 billion acquisition of troubled Indian firm Ranbaxy Laboratories, bringing the pact one step closer to completion.

The FTC has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements (HSR) Act, satisfying one of the essential conditions to the closing of the acquisition.

However, the clearance is subject to Ranbaxy selling its interests in generic versions of the antibiotic minocycline. The regulator had previously complained that the merger would likely harm competition in this area.

“Sun Pharma and Ranbaxy are working closely towards completion of the transaction and will comply with the conditions laid down in the FTC consent agreement within the specified time,” the firms say in a joint statement.

The minocycline business is set to be bought by another Indian company that sells generics in the US – Torrent Pharmaceuticals.

Similar conditions were set by the Competition Commission of India (CCI) when it approved the merger in December. The companies must sell seven of their overlapping products in the country in areas where the combined entity could control up to 95% of the market – which the CCI called a ‘near monopoly’.

The transaction will create the fifth-largest generics company in the world, and the largest pharma firm in the companies’ native India.

Manufacturing concerns

The clearance from the FTC comes despite increased scrutiny from the US on Indian drug firms over the past year, and escalating woes for both Ranbaxy and Sun Pharma.

The FDA has banned several of Ranbaxy’s products in America over similar safety concerns and fined the company $500 million for selling adulterated drugs.

In March the US also imposed a ban on imports from a division of Sun Pharma over manufacturing concerns, saying that the unit was not “operating in conformity with good manufacturing practices”.

This was followed by the company recalling 400,000 bottles of anti-depressant and antihistamine from the country in May.

The merger now just needs clearance from the Punjab and Haryana High Court in India to finally go ahead. The court is due to hear the case today.

George Underwood

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