Sandoz will temporarily supply two of three generic drugs to be divested to Amide Pharmaceuticals as part of a proposed consent order with the Federal Trade Commission, clearing the way for Novartis' acquisition of Eon Labs.

Under the proposed order, announced by FTC July 19, Novartis will sell to Amide all manufacturing and marketing assets for the antidepressant desipramine, muscle relaxant orphenadrine and tuberculosis treatment rifampin.

The divestiture of the three drugs must be completed within 10 days of Novartis' acquisition of Eon.

The Novartis generics unit will supply Amide with desipramine hydrochloride tablets and orphenadrine citrate ER tablets until Amide obtains the necessary manufacturing clearances from FDA.

Sandoz will supply desipramine for two years, plus an option for two one-year extensions "if Amide is making progress toward approval and needs the additional time," FTC explains in an analysis accompanying the proposed consent order.

Orphenadrine will be supplied for four years, with the same extension option. The supply agreement does not extend to rifampin oral capsules, which Amide has contract manufactured for Novartis for several years.

The three divestitures and related supply arrangements remove the final antitrust hurdle for Novartis' acquisition of Lake Success, N.Y.-based Eon.

Novartis announced its plan to purchase Eon and Hexal AG for $8.76 bil. in February (¹ Also see "Novartis Boosts Sandoz Generic Business With Acquisition Of Eon, Hexal" - Pink Sheet, 22 February, 2005.). The Hexal deal cleared the European Commission in May and was completed on June 6.

With the addition of both firms, Sandoz becomes the global leader in generic sales with $5.1 bil. in pro forma revenue. In the U.S., the firm is the second largest generics player, trailing only Teva.

Eon adds 67 drug molecules in 147 dosages in the U.S., as well as over 25 ANDAs pending at FDA. Sandoz now boasts a generic portfolio with more than 600 active ingredients and 5,000 dosage forms.

The exclusion of the three divested drugs is a relative drop in the bucket: Novartis reported that aggregate sales of desipramine, orphenadrine and rifampin totaled approximately $5 mil. in 2004.

Nonetheless, FTC determined Novartis and Eon's overlapping presence in each of the three markets, coupled with a dearth of competitors, would cause "significant anticompetitive harm to U.S. consumers."

Although annual U.S. sales of generic desipramine (equivalent to Sanofi-Aventis' Norpramin ) is estimated to be less than $6 mil., Novartis and Eon are the only manufacturers of all six strengths of the generic. Watson Pharmaceuticals, the sole competitor, produces only three of the six strengths, FTC notes.

Similarly, U.S. sales of generic orphenadrine extended-release tablets (3M's Norflex ) are under $10 mil. a year, but Impax Labs/Global Pharmaceuticals is the only other manufacturer, FTC's analysis states.

"The acquisition would result in a duopoly with Novartis accounting for approximately 70% of all prescriptions of generic orphenadrine citrate," the agency adds.

Annual stateside sales of generic rifampin capsules (Aventis' Rifadin ) total roughly $14.5 mil.; VersaPharm is the only other marketer in the U.S.

Transfer of the technology to Amide will be overseen by an interim trustee, appointed under the proposed consent order. FTC will accept comments on the order until Aug. 18.

Amide, the ninth largest generic manufacturer in the U.S., will add the three drugs to its stable of over 80 products as the privately held firm goes through its own integration process: Icelandic generic company Actavis recently announced plans to acquire the Little Falls, N.J.-based firm (² Also see "Actavis Enters U.S. Generic Market Through $500 Mil. Amide Acquisition" - Pink Sheet, 20 May, 2005.). The transaction is expected to close in the third quarter.

- Karl Uhlendorf

Novartis' Purchase Of Eon Clears FTC; Amide Gets Three Divested Generics

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