Drugmaking giant Allergan (AGN) - Get Report on Monday entered deals to sell two of its medications – Brazikumab and Zenpep – to Nestle and AstraZeneca (AZN) - Get Report respectively in an effort to satisfy regulators and gain approval of its $63 billion agreement to be acquired by AbbVie (ABBV) - Get Report.
The companies announced on Monday that Nestle and AstraZeneca have agreed to buy the rights to the two drugs – one to treat Crohn’s disease and the other to help people digest food properly. Terms of the details weren't disclosed.
The sales are part of Abbvie’s and Allergan’s efforts to gain regulatory approval for their massive merger, which if approved will give the combined company control of the lucrative wrinkle treatment Botox and diversify AbbVie's heavy dependence on its $19-billion-per-year arthritis drug Humira, the world’s best-selling medicine that is advancing toward U.S. patent expiration.
"These definitive agreements represent significant progress toward the completion of our acquisition of Allergan," AbbVie CEO Richard Gonzalez said in a statement.
"Allergan's commercial and R&D teams have invested so much of themselves into the development of brazikumab and the commercialization of Zenpep, and these divestiture agreements will enable that work to continue following the close of our planned acquisition," Allergan CEO Brent Saunders said in the statement.
The closings of both acquisitions are contingent upon receipt of Federal Trade Commission and European Commission approval, closing of AbbVie's pending acquisition of Allergan and the satisfaction of other customary closing conditions, the companies said.
Shares of AbbVie were up 1.17% at $84.52 in morning trading on Monday, while shares of Allergan were up 0.73% at $189.57.
Separately, AbbVie said China was testing its HIV drug, Aluvia, as a treatment for symptoms of the coronavirus.