[Federal Register Volume 65, Number 250 (Thursday, December 28, 2000)]
[Notices]
[Pages 82374-82378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-33029]
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FEDERAL TRADE COMMISSION
[File No. 001 0088; Docket No. C-3990]
Glaxo Wellcome plc and SmithKline Beecham plc; Analysis to Aid
Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint that accompanies the consent agreement and the terms of the
consent order--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before January 17, 2001.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room H-159, 600 Pennsylvania Avenue, NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Molly S. Boast or Jacqueline K.
Mendel, FTC/H-374, 600 Pennsylvania Avenue, NW., Washington, DC 20580,
(202) 326-2039 or 326-2603.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and section 2.34 of
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby
given that the above-captioned consent agreement containing a consent
order to cease and desist, having been filed with and accepted, subject
to final approval, by the Commission, has been placed on the public
record for a period of thirty (30) days. The following Analysis to Aid
Public Comment describes the terms of the consent agreement, and the
allegations in the complaint. An
[[Page 82375]]
electronic copy of the full text of the consent agreement package can
be obtained from the FTC Home Page (for December 18, 2000), on the
World Wide Web, at ``http://www.ftc.gov/os/2000/12/index.htm.'' A paper
copy can be obtained from the FTC Public Reference Room, Room H-130,
600 Pennsylvania Avenue, NW., Washington, DC 20580, either in person or
by calling (202) 326-3627.
Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room H-159, 600 Pennsylvania Avenue, NW.,
Washington, DC 20580. Two paper copies of each comment should be filed,
and should be accompanied, if possible, by a 3\1/2\ inch diskette
containing an electronic copy of the comment. Such comments or views
will be considered by the Commission and will be available for
inspection and copying at its principal office in accordance with
section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR
4.9(b)(ii)).
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an agreement containing a proposed Consent Order
from Glaxo Wellcome plc (``Glaxo'') and SmithKline Beecham plc.
(``SB'') which is designed to remedy the anticompetitive effects of the
merger of Glaxo and SB. Under the terms of the agreement, the companies
would be required to: (1) Divest all of SB's worldwide rights and
intellectual property relating to its antiemetic drug, Kytril, to F.
Hoffman LaRoche; (2) divest SB's intellectual property rights to
manufacture and market ceftazidime to Abbott Laboratories; (3) divest
SB's worldwide rights and intellectual property relating to its
antiviral drugs, Famvir and Denavir, including the rights to the base
active ingredients, penciclovir and famciclovir, to Novartis Pharm AG
and Novartis Pharmaceuticals Corporation; (4) return to Cantab
Pharmaceuticals plc all rights to use Cantab's DISC technology for the
development of a prophylactic herpes vaccine; (5) divest Glaxo's U.S.
and Canadian Zantac trademark rights to Pfizer (formerly Warner-
Lambert) and thereby remove restrictions on the ability of Pfizer's
Zantac 75 to compete in the over-the-counter (``OTC'') H-2 blocker acid
relief market; (6) assign all of SB's relevant intellectual property
rights and relinquish all options to the drug renzapride, a drug to
treat irritable bowel syndrome, to Alizyme plc; (7) assign all of
Glaxo's relevant intellectual property rights and relinquish all of
Glaxo's reversionary rights to GI147211C, a topoisomerase I inhibitor
to treat certain types of cancer, to Gilead Sciences, Inc.; and (8)
assign all of SB's relevant intellectual property rights and relinquish
all options to regain control over frovatriptan, a drug to treat
migrane headaches, to Vernalis Ltd.
The proposed Consent Order has been placed on the public record for
thirty (30) days for receipt of comments by interested persons.
Comments received during this period will become part of the public
record. After thirty (30) days, the Commission will again review the
agreement and the comments received, and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
Consent Order.
Pursuant to a scheme of arrangement announced on January 17, 2000,
Glaxo and SB propose to combine their two companies in a transaction
valued at approximately $182 billion. Thereafter, the merged entity
will be renamed Glaxo SmithKline plc. The proposed Complaint alleges
that the proposed merger, if consummated, would constitute a violation
of Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and section
5 of the FTC Act, as amended, 15 U.S.C. 45, in the markets for the
research, development, manufacture and sale of: (1) 5HT-3 antiemetic
drugs; (2) ceftazidime; (3) second generation oral and intravenous
antiviral drugs for the treatment of herpes virus infections; (4)
prescription topical antiviral cremes for herpes labialis or oral
herpes, commonly referred to as cold sores; (5) prophylactic herpes
vaccines; (6) OTC H-2 blockers; (7) topoisomerase I inhibitors marketed
or in development for the treatment of ovarian, non-small cell lung,
colorectal and other solid tumor cancers; (8) drugs for the treatment
of irritable bowel syndrome (``IBS''); and (9) triptan drugs for the
treatment of migraine headaches. The proposed Consent Order would
remedy the alleged violations by replacing the lost competition that
would result from the merger in each of these markets.
5HT-3 Antiemetic Drugs
Antiemetic drugs are administered to cancer patients undergoing
chemotherapy and radiation therapy to prevent or lessen the nausea and
vomiting associated with those medical procedures. 5HT-3 antiemetic
products have revolutionized the treatment of patients with cancer
because they are more effective than any of the older antiemetic
products. Today, oncologists can pursue more aggressive chemotherapy
and radiation regimens because patients are much less likely to
experience debilitating nausea and vomiting, side effects that can
curtail aggressive cancer treatment.
The United States market for 5HT-3 antiemetic drugs is highly
concentrated. In the $778 million dollar 5HT-3 antiemetic market, Glaxo
markets Zofran and SB markets Kytril, which together represent
approximately 90% of the market. Only one other firm, Aventis, markets
a 5HT-3 antiemetic product, called Anzemet.
Entry into the manufacture and sale of prescription pharmaceutical
drugs is difficult, expensive, and time-consuming. De novo entry for
pharmaceutical products has been estimated to take between 12 and 24
years and cost upwards of $359 million. No other pharmaceutical company
is expected to enter the United States market with a 5HT-3 antiemetic
product in the foreseeable future.
The merger of SB and Glaxo would reduce the number of 5HT-3
antiemetic competitors from three to two; create a dominant firm with a
greater than 90% share of the overall market; and leave Anzemet as the
only remaining competitor against the combined Glaxo SmithKline.
Currently, health care provider customers benefit enormously by
competing Zofran and Kytril against one another to achieve favorable
pricing.
The Consent Agreement effectively remedies the anticompetitive
effects in the market for 5HT-3 antiemetic drugs by requiring that: (1)
SB divest all of its worldwide rights and intellectual property
relating to Kytril (granisetron) to F. Hoffman-La Roche Ltd.
(``Roche''); (2) SB submit all confidential information and know-how
regarding Kytril to Roche; (3) the former SB sales force and management
who participated in the marketing of Kytril maintain the
confidentiality of this information; and (4) the former SB sales and
marketing personnel be prohibited from selling products that compete
with Kytril, i.e., Zofran, for a period of six to twelve months
(depending on the status of the employee).
The Consent Agreement also requires SB to contract manufacture
Kytril for Roche until Roche obtains approval from the U.S. Food and
Drug Administration (``FDA'') to manufacture Kytril for itself.
Second Generation Oral and Intravenous Antiviral Drugs for the
Treatment of Herpes
SB manufactures and markets Famvir, and Glaxo manufactures and
markets Valtrex, the only two second generation oral and intravenous
antiviral prescription drugs for the treatment of
[[Page 82376]]
herpes infections. Due to their greater bioavailability, superior
efficacy, and requirements for less frequent dosing, Famvir and Valtrex
have a significant advantage in treating herpes simplex virus Type 1
(``HSV-1''), herpes simplex virus Type 2 (``HSV-2'') and the herpes
varicella zoster virus (``herpes zoster'') over the first-generation
drug acyclovir.
New entry into the manufacture and sale of second generation
antiviral drugs for the treatment of HSV-1, HSV-2 and herpes zoster
infection is difficult, time-consuming, and expensive. SB and Glaxo are
the only firms that have introduced second generation products to the
market, and no other companies are developing drugs for these
indications. Thus, given the amount of time it would take for a new
product to obtain regulatory approval, entry cannot occur in a timely
fashion to counter the anticipated anticompetitive effects of the
proposed merger.
The proposed merger of SB and Glaxo would eliminate the only
competition that exists in the $500 million market for second
generation prescription oral and intravenous antiviral drugs for the
treatment of HSV-1, HSV-2, and herpes zoster. As a result of the
proposed merger, American consumers are likely to pay higher prices for
Valtrex and Famvir, and because SB and Glaxo offer the only second
generation drugs available to treat HSV-1, HSV-2, and herpes zoster
infections, the merger will result in a monopoly for an extended
period, as there are no other drugs in research or development for
these indications.
The proposed divestiture to Novartis remedies the anticompetitive
effects of the merger in both the oral and intravenous antiviral herpes
infection treatment market as well as those in the topical oral herpes
prescription creme market, which is discussed below. In the oral and
intravenous herpes antiviral market, the divestiture resolves the
anticompetitive effects of the proposed merger by requiring that: (1)
SB divest all of its worldwide rights and intellectual property
relating to Famvir, including rights to the base active ingredient
famciclovir, to Novartis; (2) SB submit all confidential information
and know-how regarding Famvir to Novartis; (3) the former SB sales
force and management who participated in the marketing of Famvir
maintain the confidentiality of this information; and (4) the former SB
sales and marketing personnel be prohibited from selling products that
compete with Famvir, i.e., Valtrex, for a period of six to twelve
months (depending on the status of the employee).
The Consent Agreement also requires SB to contract manufacture
Famvir for Novartis until Novartis obtains FDA approval to manufacture
Famvir for itself.
Prescription Topical Antiviral Cremes for Oral Herpes
SB's Denavir is currently the only prescription topical antiviral
medication approved by the FDA for the treatment of oral herpes
infections, commonly called cold sores. Meanwhile, Glaxo's Zovirex
creme is the dominant prescription cold sore product in much of Europe.
Glaxo was in the final stages of seeking FDA approval to market its
creme formulation of Zovirex for the treatment of oral cold sores in
the United States. But, in April of 2000, after the announcement of its
proposed merger with SB, Glaxo withdrew the Zovirex creme application
then pending at the FDA, but without prejudice to refiling. At the
time, Glaxo was a little more than six months from bringing its Zovirex
cream to the U.S. market to compete against Denavir.
De novo entry into prescription topical antiviral cremes for the
treatment of oral herpes is difficult, time-consuming, and expensive.
No other companies are currently developing prescription topical
medications for the treatment of cold sores.
The proposed merger eliminates the only potential entrant into the
market for prescription topical antiviral medications for the treatment
of cold sores--the Zovirex creme which Glaxo was close to bringing to
market. If SB and Glaxo merge, it is highly unlikely that the merged
firm would bring the Zovirex cream to market to compete against
Denavir.
As noted above, the proposed divestiture to Novartis remedies the
anticompetitive effects of the merger in both the oral and intravenous
antiviral herpes infection treatment market as well as those in the
prescription topical oral herpes antiviral market. In the prescription
topical oral herpes antiviral market, the divestiture resolves the
anticompetitive effects of the proposed merger by requiring that: (1)
SB divest all of its worldwide rights and intellectual property
relating to Denavir, including rights to the base active ingredient
penciclovir, to Novartis; (2) SB submit all confidential information
and know-how regarding Denavir to Novartis; (3) the former SB sales
force and management who participated in the marketing of Denavir
maintain the confidentiality of this information; and (4) the former SB
sales and marketing of Denavir maintain the confidentiality of this
information; and (4) the former SB sales and marketing personnel be
prohibited from selling products that compete with Denavir, i.e.,
topical Zovirex cream, for a period of six to twelve months (depending
on the status of the employee).
The Consent Agreement also requires SB to contract manufacture
Denavir for Novartis until Novartis obtains FDA approval to manufacture
Denavir for itself.
Ceftazidime
Ceftazidime is an injectable antibiotic administered to
hospitalized patients who are critically ill and at risk of
contracting, and possible dying from, pseudomonas infection, a serious
hospital-borne infection. Ceftazidime is considered the ``gold
standard'' for treating patients who are either at risk of contracting
pseudomonas or who have such infections. Ceftazidime is a third-
generation of a class of antibiotics called cephalosporins and is
considered a ``broad spectrum'' antibiotic effective at treating a
broad range of hospital-borne infection. Nearly all hospitals in the
U.S. have ceftazidime on their formularies for use in combating
pseudomonas infections.
Last year, sales of all ceftazidime products were approximately $82
million dollars in the U.S. Currently, only two firms, SB and Glaxo,
manufacture ceftazidime. Three firms market ceftazidime products: Glaxo
manufactures and markets Fortaz and Ceptaz; Lilly markets Tazidime,
which is manufactured by SB; and Abbott Labs markets SB's Tazicef brand
in the U.S. In 1999, sales of Glaxo's Fortaz and Ceptaz and of SB's
Tazicef amounted to 85% of the market.
There are significant barriers to entry into the manufacture and
sale of ceftazidime. The production of ceftazidime requires an aseptic
facility for both the manufacture and sterile filling processes,
greatly increasing the costs and complexities of manufacturing the
product. Building and obtaining FDA approval for this type of facility
takes much longer than two years, and patents covering the manufacture
of ceftazidime that do not expire for a number of years prevent generic
production of ceftazidime at this time.
The proposed merger of Glaxo and SB would create a monopoly in the
manufacture of ceftazidime and would reduce the number of firms
marketing ceftazidime from three to two. Glaxo SmithKline would not
likely continue its relationship with Abbott as a marketer, removing a
competing marketer of branded ceftazidime. Lilly, the only other
competitor to Glaxo
[[Page 82377]]
SmithKline, would be dependent on Glaxo SmithKline for its supply. The
presence of three ceftazidime competitors in the market allows
customers to negotiate more favorable pricing than would be possible
with only two firms. Consequently, after the merger, customers' ability
to negotiate lower prices for ceftazidime would diminish, likely
resulting in higher prices.
The Consent Agreement effectively remedies the anticompetitive
effects in the market for ceftazidime by requiring: (1) SB to provide
all necessary intellectual property rights to manufacture and market
ceftazidime to Abbott Laboratories, and (2) the creation of a new
stream of supply for ceftazidime to Abbott that is independent of SB.
Thereby, the Consent Agreement replaces SB's manufacturing and
marketing rights and capabilities in the United States ceftazidime
market.
Prophylactic Herpes Vaccines
The evidence shows that the development of prophylactic vaccines to
prevent infection by HSV-1 and HSV-2 is a relevant product market.
Currently, no vaccines exist for the prevention of HSV-1 and HSV-2
infection, but SB and Glaxo are two of very firms developing
prophyactic vaccines to prevent herpes infections.
SB is one of the world's three leading vaccine suppliers, and
currently, SB has the most advanced development effort toward a
prophylactic herpes vaccine. Glaxo is relatively new in the vaccine
area, but has a significant effort underway to develop vaccines against
genital herpies. Glaxo has been developing a vaccine for genital HSV
infection using the Disabled Infectious Single Cycle (``DISC'')
technology developed by Cantab Pharmaceuticals. With Cantab, Glaxo is
currently pursuing a therapeutic indication, and had planned to begin
work with Cantab designing Phase III clinical trials on a prophylactic
indication this year, exercising its option to do so pursuant to its
contract with Cantab.
New entry into the research, development, manufacture and sale of
vaccines to prevent HSV-1 and HSV-2 infection is extremely difficult,
time-consuming, and expensive. Development of vaccines for other
diseases have generally taken more than a decade and the time frames
for vaccine development tend to be longer than those for prescription
drugs. Other firms that have undertaken efforts to develop a
prophylactic herpes vaccine either have failed in their efforts or are
far behind and Glaxo/Cantab.
The merger is likely to chill innovations in a very complex area as
a combined Glaxo SmithKline would potentially forego the development
efforts of one of the firms. Even if both products were developed, the
merger would eliminate future price competition between the two
prophylactic vaccines.
The Consent Agreement effectively remedies the anticompetitive
effects in the market for prophylactic vaccines for the prevention of
infection by HSV-1 and HSV-2 by requiring Glaxo to return to Cantab all
rights and information and results from clinical trials that are
necessary for Cantab to develop a prophylactic herpes vaccine. This
will permit Cantab to pursue a prophylactic indication for the vaccine
developed by the joint venture, and, should that effort be
unsuccessful, to develop a different prophylactic herpes vaccine using
its DISC technology.
OTC H-2 Blockers
Histamine-2 blockers, more commonly known as ``H-2 blockers,'' are
a class of drugs available over-the-counter (``OTC'') for acide relief.
H-2 blocker products originated as prescription products and were later
approved by the FDA for OTC sale. As their name implies, H-2 blockers
work by blocking histamine (acid) prodution, acting in essence like
corks to prevent the release of stomach acid.
Today, the $502 million OTC H-2 blocker market is comprised of four
branded products--SB's Tagamet, Glaxo's Zantac 75 (marketed by Pfizer,
formerly WArner-Lambert), Johnson & Johnson's Pepcid AC and Whitehall-
Robin's Axid, along with private label equivalents of Tagamet, Zantac
75, and Pepcid AC. SB's Tagamet and Glaxo's Zantac 75 have a combined
market share of approximately 41%.
Entry into the OTC H-2 blocker acid relief market is time-
consuming, difficult, and expensive. New products take several years to
develop; each must be approved by the FDA for OTC sale, or
alternatively, approved to switch from prescription to OTC status; and
furthermore, expensive advertising and promotion is required to
establish a brand name in the OTC market. Currently, no additional H-2
blockers are expected to enter the OTC market.
The merger of SB and Glaxo is likely to lessen the competitivenes
of Zantac 75 in the OTC market where it is marketed by Pfizer.
Currently, the trademark license under which Pfizer sells Zantac 75
requires the approval of Glaxo for any product or trademark changes or
improvements. Prior to the merger, as licensor to Pfizer, Glaxo had the
incentive to approve changes or improvements that would enhance the
competitiveness of Zantac 75 in the OTC H-2 blocker market. But after
the merger, it is likely that Glaxo SmithKline will be less inclined to
approve changes to enhance the competitiveness of Zantac 75, an OTC H-2
rival to its Tagamet. Furthermore, Pfizer would be in the difficult
position of having to ask its close rival for permission to make
product improvements, thereby exposing its future competitive strategy,
which the rival might preemptively counter. Such a situation could
prevent or discourage Pfizer from pursuing such competitive product
improvements, as Glaxo SmithKline would be provided with direct access
to cometitive intelligence on a product that competes directly against
its own.
The Consent Agreement effectively remedies the anticompetitive
effects in the market for OTC H-2 blockers by: (1) Requiring Glaxo to
divest all of its U.S. and Canadian trademark rights to Zantac to
Pfizer; (2) removing all requirements on Pfizer to seek prior approval
from Glaxo for any product line extensions; (3) removing all
restrictions on Pfizer's ability to seek FDA approval of higher OTC
dosage strengths for Zantac; (4) reducing the cost to Pfizer if a
higher dosage strength is approved by the FDA for the OTC market to a
payment not to exceed $3 million; and (5) allowing Pfizer to use any
FDA approved form of the base active, ranitidine, in Zantac products.
In the United States and Canada, Glaxo only retains the exclusive use
of the Zantac name for prescription products that contains ranitidine.
This gives Pfizer the unrestricted ability to market the OTC Zantac
products, improve those products, and use the Zantac trademarks
unfettered, which will allow Pfizer to compete vigorously and
effectively in the OTC H-2 blocker market.
Topoisomerase I Inhibitors for the Treatment of Ovarian, non-SCLC,
Colorectal, and Other Solid Tumor Cancers
zSB's drug Hycamptin is currently a leading therapy for ovarian and
non-small cell lung cancer (``non-SCLC''), and SB is pursuing
indications for these cancers as well as a second-line indication for
treating colorectal and other solid-tumor cancers. Gilead Sciences, in
conjunction with Glaxo, is developing a topoisomerase I inhibitor,
GI14722C, that is being developed for ovarian, breast, non-SCLC, and
other solid tumor indications, including colorectal cancer. The only
other topoisomerase I inhibitor on the market
[[Page 82378]]
is Pharmacia's Camptosar, which is indicated as a second-line treatment
for colorectal cancer, and is being tested for non-SCLC.
The proposed merger is likely to create anticompetitive effects in
the topoisomerase I inhibitor market by potentially eliminating one of
the few research and development efforts in this area. As a result of
the merger, the combined entity could unilaterally delay, terminate or
otherwise fail to develop the GI147211C topoisomerase I inhibitor,
resulting in less product innovation, fewer choices, and higher prices
for consumers.
The Consent Agreement effectively remedies the anticompetitive
effects in the market for topoisomerase I inhibitors for the treatment
of certain cancers by requiring Glaxo to assign all relevant GI147211C
intellectual property to Gilead and to relinquish its reversionary
rights to Gilead's drug. Thus, the Consent Agreement eliminates Glaxo's
ability to regain control over GI147211C, a drug likely to compete
against SB's Hycamptin in combating ovarian, non-SCLC, colorectal, and
other solid tumor cancers.
Drugs for the Treatment of Irritable Bowel Syndrome
Irritable bowel syndrome (``IBS'') is not well understood and often
has been labeled as several different conditions, including irritable
colon and spastic colon. People with IBS experience varying symptoms,
with some sufferers experiencing symptoms of diarrhea, others
constipation, and still others a mix of both. The symptoms of IBS may
include cramping, abdominal pain and other forms of abdominal
discomfort. Seventy percent of IBS sufferers are women. IBS is
estimated to affect up to 15% of the U.S. population.
Glaxo currently owns a drug called Lotronex for the treatment of
IBS. Though effective in treating IBS sufferers, Lotronex was recently
taken off the market by Glaxo because of concerns about serious side
effects in some patients, but Glaxo continues to conduct clinical
trials for Lotronex. Lotronex is the only FDA-approved drug for the
treatment of IBS. SB currently does not have a drug in this market, but
has an option to acquire and market renzapride, a drug being developed
by Alizyme Therapeutics plc for the treatment of IBS. Alizyme's
renzapride drug is about 2-3 years from being on the market. In
addition to the Alizyme/SB renzapride development effort, only two
other drugs for IBS are in clinical development; thus, timely entry
will not occur to deter or counteract the likely anticompetitive
effects of the proposed merger.
The proposed merger likely would eliminate one of the few research
and development efforts on drugs to treat IBS. As a result of the
merger, Glaxo SmithKline would likely delay, terminate or otherwise
fail to develop renzapride which would compete against Lotronex,
resulting in less product innovation, and consequently, fewer product
choices, and higher prices for consumers.
The Consent Agreement effectively remedies the anticompetitive
effects in the market for drugs to treat IBS by requiring SB to assign
all relevant intellectual property rights to Alizyme and to relinquish
all options in renzapride, thus removing any possible influence over
Alizyme's development of an IBS drug that is likely to compete directly
against Glaxo's Lotronex.
Triptan Drugs for the Treatment of Migraine Headaches
Glaxo is the leading seller of triptan drugs for the treatment of
migraine headaches with its two triptan migraine drugs--Immitrex
(sumatriptan succinate) and Amerge (naratriptan hydrochloride). SB has
a reversionary interest in another triptan drug for migraines--SB209509
(frovatriptan)--which is being developed by Vernalis Ltd. The only
other approved migraine drugs in the triptan class are Maxalt
(rizatriptan benzoate) from Merck and Zomig (zolmitriptan) from Astra
Zeneca. Vernalis expects to submit final data to the FDA by the end of
2000, and hopes to launch its frovatriptan drug in the second half of
2001.
In addition to the SB/Vernalis frovatriptan effort, only two other
triptan drugs for migraine are in clinical development and are well
behind the SB/Vernalis efforts. Thus, timely entry will not occur to
deter or counteract the likely anticompetitive effects of the proposed
merger.
The proposer merger likely would eliminate one of the few research
and development efforts on triptan drugs to treat migraines. As a
result of the merger, Glaxo SmithKline would likely delay, terminate or
otherwise fail to develop frovatriptan which would compete against
Glaxo's Immitrex and Amerge, resulting in less product innovation, and
consequently, fewer product choices and higher prices for consumers.
To resolve the merger's anticompetitive effects in this market, SB
renegotiated its agreement with Vernalis, assigning all relevant
intellectual property to Vernalis and relinquishing its options in
frovatriptan, which likely will compete directly against Glaxo's
Immitrex and Amerge.
The Consent Agreement also allows the Commission to appoint a
Monitor Trustee to ensure Glaxo SmithKline's compliance with all of the
requirements of the Order. In addition, the Commission may appoint a
Divestiture Trustee in the event that Glaxo SmithKline fails to divest
all of the assets required to be divested. Finally, the Consent
Agreement imposes reporting requirements on Glaxo SmithKline until such
time as it has fully complied with all of the provisions of the Order.
The purpose of this analysis is to facilitate public comment on the
proposed Consent Order, and it is not intended to constitute an
official interpretation of the proposed Consent Order or to modify its
terms in any way.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-33029 Filed 12-27-00; 8:45 am]
BILLING CODE 6750-01-M