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Our Bureau

Mumbai, Aug. 14 The US Federal Trade Commission (FTC) has cleared Sun Pharma’s proposal to buy Israel-drug maker Taro, but first required the Mumbai-based drug maker to sell rights and assets of three of its generic versions of anti-epilepsy drug carbamazepine, as an anti-competitive move.

Sun has agreed to sell these three distinct generic formulations to Gujarat’s Torrent Pharmaceutical Ltd, an FTC note said.

Details on the financials were, however, not available from Sun Pharma. Explaining why Sun Pharma was to sell the generic drugs, the FTC note said that the proposed transaction would be anti-competitive and would cause US consumers to pay higher prices for these three drugs.

“Both companies either manufacture the relevant generic drug products and sell them in the US, or are set to enter the US market with competing products in the near future, pending regulatory approval,” the note said. To remedy the alleged anti-competitive impact of the proposed transaction, Sun has entered into a consent order with the Commission under which Sun will sell rights on these drugs, the note added.

“The proposed acquisition would remove the direct competition between Sun and Taro for these key products and deny consumers the benefits of lower generic drug prices,” said Mr Jeffrey Schmidt, Director of the FTC’s Bureau of Competition.

“The Commission’s action today preserves this vital competition by requiring Sun to sell three products to an independent competitor,” he said.

Sun Pharma and Taro have been in public row since the latter unilaterally terminated its $454-million acquisition proposal in May, a year after it had been formalised last year.

Both companies have filed litigation against each other in courts in Israel and New York.

Sun has agreed to divest the products despite the uncertainty over its proposal to acquire Taro, the FTC note said. The products being divested by Sun Pharma are immediate-release carbamazepine tablets; chewable carbamazepine tablets; and extended-release carbamazepine tablets. Different forms of carbamazepine, the anti-epilepsy product, are taken daily, either alone or in combination with other drugs, to prevent and control seizures, the note said. Only one of the drugs is from Sun, while the other two are from its US subsidiary Caraco, Sun Pharma said.

Sun Pharmaceutical added that the FTC had granted early termination of the antitrust waiting period under the Hart-Scott-Rodino Act (HSR) for the previously announced tender offer by Sun Pharma’s subsidiary Alkaloida Chemical Company Exclusive Group Ltd, for all outstanding Ordinary Shares of Taro Pharmaceutical Industries.

The offer opened on June 30 and is scheduled to close on September 2, unless it is extended, the company said. Sun’s offer for Taro’s outstanding shares was at $7.75 a share. At present, it holds 36 per cent in Taro and has invested up to $100 million in Taro, including a direct investment of over $60 million in the company, a Sun official said.

Sun Pharma’s shares were marginally down at Rs 1,447.70 on the BSE.

More Stories on : Pharmaceuticals | Mergers & Acquisitions | Corporate Disputes | Sun Pharmaceutical Industries Ltd

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