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FTC says Novartis must sell eye drug

The Federal Trade Commission has told Novartis it must sell its injectable eye care drug Miochol-E as a condition of the company's acquisition of Alcon

The Federal Trade Commission (FTC) is requiring Novartis to divest Miochol-E (acetylcholine chloride), an injectable eye care drug used in cataract surgery, as a condition of the firm's planned acquisition of the ophthalmic drugs company Alcon.

The FTC maintains that because Novartis and Alcon are the only two US manufacturers of injectable miotics, the acquisition would create a monopoly that would lead to higher prices for consumers unless Novartis sells off its product. Injectable miotics are used to shrink the pupil during surgery to help determine whether a rupture has occurred in the eye.

Miochol-E has a 67 per cent share of the US market for injectable miotics, while Alcon's Miostat has a 33 per cent share. Jointly, the drugs have annual US sales of around $12.4m.

Novartis has agreed to sell its drug to Bausch & Lomb within 10 days of its acquisition of Alcon. The FTC said the company must also provide transitional services and must transfer its third-party manufacturing arrangements for Miochol-E to B&L as part of the sale.

The settlement between Novartis and the FTC is open to public comment for 30 days. Assuming it is finalised, it clears the regulatory path for Novartis to buy Alcon in a proposed $50bn deal. However, the acquisition may still stumble in other areas: Novartis has made a deal to buy the majority of Alcon from Nestle, but the eye care company's minority stakeholders are resisting, claiming that the price Novartis has offered them – which is lower than what it is paying per share to Nestle – is unacceptable.

18th August 2010

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