Novartis AG’s transfer of Phase III BRAF and MEK inhibitor drugs to partner Array BioPharma Inc. will clear the way for its acquisition of GlaxoSmithKline PLC’s oncology portfolio.

The Federal Trade Commission announced Feb. 23 that Novartis had agreed to transfer all assets related to its BRAF inhibitor encorafenib and its MEK inhibitor binimetinib to Array to settle charges that the acquisition of GSK’s oncology business would be anticompetitive. [See Deal]

The divestments had already been arranged to obtain European Commission approval of the deal [See Deal]. [See Deal]

Novartis and GSK inked a three-part transaction in April under which Novartis is to acquire GSK’s marketed oncology products and two pipeline oncology compounds for approximately $16 billion [See Deal], GSK is to acquire Novartis’ vaccine business [See Deal], and the two are to establish a consumer health care joint venture ([A#14140421007]).

In its complaint, the FTC states that there are currently only two BRAF-inhibitors approved by FDA, GSK’s Tafinlar (dabrafenib) and Roche’s Zelboraf (vemurafenib), and that Novartis is the only other firm likely to begin competing with a BRAF inhibitor in the near future.

In addition, the agency notes that GSK’s Mekinist (trametinib) is the only FDA-approved MEK inhibitor and that Roche and Novartis are two of only a small number of companies with MEK inhibitors in late-stage clinical development.

“The near-term application of BRAF and MEK inhibitors is primarily as a combination product to treat melanoma,” the complaint says. It notes that GSK sells the only FDA-approved BRAF/MEK combination, consisting of Tafinlar and Mekinist, and that Roche and Novartis have combinations in clinical development and likely will be the only other firms to compete against GSK’s combination in the near future.

“Development of a BRAF inhibitor and MEK-inhibitor by a new entrant would be difficult, expensive, and time-consuming, in large part because new oncology medicines must complete clinical trials and receive FDA approval before they can be sold in the United States,” the complaint states.

“No firms have products in development which are likely to enter the relevant markets and prevent the competitive harm from the transaction.”

GSK To Divest Vaccines Under EC Edicts

As for the two other parts of the Novartis-GSK transaction, FTC announced in November that Novartis would divest its Habitrol branded nicotine patch and its private-label patch business to Dr. Reddy's Laboratories Ltd. to settle charges that the proposed consumer health care joint venture would likely be anticompetitive. [See Deal]

Novartis and GSK, which sells the nicotine patch Nicoderm CQ, are the only companies that market branded nicotine patches in the U.S. and two of only three companies that supply private label patches to retailers.

The agency has not announced any conditions with regard to GSK’s acquisition of Novartis’ vaccines. A spokesperson said FTC could not confirm if an investigation is underway.

The European Commission, Europe’s top competition regulator, is requiring GSK to divest its meningitis and tetanus-diphtheria vaccines and smoking cessation products in Europe, as well as requiring Novartis to divest its BRAF and MEK inhibitors, for the deal to go through ([A#14150129001]).

After the Novartis-GSK transaction was announced Array said it expected Novartis to give it back rights to the MEK inhibitor binimetinib. Array entered a co-development and commercialization partnership with Novartis in 2010 Also see "Array Expects To Have Phase III MEK Inhibitor All To Itself, Without Partner Novartis" - Pink Sheet, 12 August, 2014..

Novartis announced last month that it was also returning the BRAF inhibitor encorafenib to Array for a “de minimis” amount ([A#00150126014]).

FTC will decide whether to make the proposed consent order final following the public comment period, which extends through March 25.

Novartis/GSK Cancer Deal Gets FTC OK Based On Existing Divestments

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