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  • Jonathan Poyer

Will the FTC Cause a Fury of M&A Deals with Their Latest Proposal?

Updated: Jul 13, 2023

The U.S. Federal Trade Commission's (FTC) recent proposal to overhaul the merger review process further incentivizes big pharma and biotech to pursue M&A deals near term.

The proposed changes to the Hart-Scott-Rodino (HSR) premerger notification program would dramatically increase disclosure requirements, adding time, cost and risk to the process. HSR has been in place since 1978 and the new changes may be implemented by early 2024. Legal experts estimate the filing burden may increase by 400-500% providing plenty of incentive for deals to get done before implementation.

Company-specific news was limited during the holiday week going into earnings season, but Biogen (BIIB) and Eisai (4523.JP) did announce FDA granted full approval to Alzheimer's therapy Leqembi. BIIB traded down slightly on the news as the approval was widely expected and came with slightly stronger warning language in the label.

Broader reimbursement through Medicare is now in place, but there is also a requirement to follow patients in a registry. FDA also recommended genetic testing for bleeding risk and four monitoring MRI scans during the first year of therapy. BIIB continues to guide for ~100K patients on drug within three years while consensus estimates are materially lower reflecting expectations for a slower ramp. Time will tell if BIIB's forecasting is more accurate than numbers on the street.

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