The fallout from the COVID-19 pandemic is affecting business in myriad ways, and that includes regulatory reviews of mergers and acquisitions.
The merger between Pfizer’s Upjohn generics unit and Mylan is thought to be the first big transaction in pharma to be set back as a result of the widespread disruption caused by the coronavirus, and is now scheduled to take place in the latter half of this year.
Meanwhile, Mylan’s meeting of shareholders to approve the deal is also being moved back from 27 April to 30 June. It’s due to be held in the Netherlands, where Mylan is domiciled, and for now the country has a ban on meetings.
Pfizer’s plan to spin out its Upjohn generic drugs business into a joint venture with Mylan called Viatris was formerly due to complete in the middle of this year. It will create a generics giant with annual sales of around $20bn this year, owned 57% to 43% by Pfizer and Mylan shareholders, respectively.
It is part of a restructuring drive at the big pharma company that aims to slim down its operations, concentrate resources on its more-profitable branded medicines division, and provide it with extra capital to spend on bolt-on acquisitions and licensing.
Pfizer has also previously shed its veterinary business, a baby formula unit and its consumer products division via a deal with GlaxoSmithKline.
There are no changes to the terms of the deal, which will see Pfizer acquire Mylan, merge it with Upjohn and spin out the combined division as a separate company. The delay is simply put down to “unprecedented circumstances surrounding the COVID-19 pandemic, including associated delays in the regulatory review process”.
The Federal Trade Commission (FTC) and Department of Justice (DoJ) said this week that they were implementing an expedited antitrust procedure to make it easier for companies to work together on COVID-19 related activities such as temporarily combining production, distribution, or service networks.
At the same time, it has warned that some antitrust reviews may take longer, for example if key staff and documents can’t be made available during the crisis.
“Mylan, Pfizer and Upjohn are working closely on integration planning and are making significant progress toward Day 1 readiness,” they said in a joint statement. “Together the companies continue to progress toward a successful close.”