Dr. Reddy’s Laboratories closes the acquisition of Habitrol® Brand from Novartis

Dr. Reddy’s Laboratories has announced that it has closed the acquisition of Habitrol^® brand (an over-the-counter nicotine replacement therapy transdermal patch) from Novartis Consumer Health Inc. following issuance of the proposed consent order from the U.S. Federal Trade Commission (FTC) on November 26, 2014. The company had earlier entered into an asset purchase agreement with Novartis Consumer Health Inc. to acquire the title and rights of Habitrol^® brand and to market the product in the U.S. market.

With this closure, the company has assumed responsibility for the product and will commence shipments of the product in the market shortly.

Why Novartis divesting Harbitrol? 

Novartis AG will divest its nicotine replacement patch Habitrol, as mandated by the Federal Trade Commission, to go ahead with its consumer-health merger with GlaxoSmithKline .

As Novartis and GlaxoSmithKline are the only companies that market nicotine patches in the U.S., the FTC said the proposed joint venture would be anticompetitive and make it difficult for other companies to develop new patches.

Habitrol had U.S. sales of more than $58 million in 2013.

London-based GlaxoSmithKline and Swiss Novartis both manufacture consumer health-care products, including skin-care aids, cold-and-flu remedies, toothpaste and indigestion remedies.

The companies in April unveiled a set of complicated deals worth more than $20 billion that would create a new over-the-counter consumer-health business. The company, with sales of $11 billion, would be called GSK Consumer Healthcare. GlaxoSmithKline will control the business, with a 63.5% stake and seven of 11 board directors, and contribute its nicotine patch, Nicoderm CQ.