DOW JONES NEWSWIRES Valeant Pharmaceuticals International Inc. (VRX) must divest three drugs used to treat skin ailments in order to close its acquisitions of dermatology businesses from Johnson & Johnson (JNJ) and Sanofi SA (SNY, SAN.FR), the Federal Trade Commission said Monday. The FTC said the divestments will preserve competition in the health-care sector and prevent higher prices that likely would have resulted from Valeant's acquisitions of Ortho Dermatologics Inc. from Johnson & Johnson and Dermik Laboratories Inc. from Sanofi. Under the proposed settlement order, Valeant will sell the manufacturing and marketing rights to drug treatments that treat acne and a pre-cancerous skin lesion to Mylan Inc. (MYL). Valeant will also sell the marketing rights to a drug that treats fine-line wrinkles to Spear Pharmaceuticals Inc. According to the FTC , the acquisition of Dermik would illegally reduce competition in the U.S. market for two topical skin-care drugs--Benzaclin and its generic equivalent, which is used to treat acne, and topical 5FU, which is used to treat a pre-cancerous lesion resulting from extensive sun exposure. The proposed settlement order requires Valeant to sell to Mylan all rights to generic Benzaclin and also orders Valeant to license to Mylan the rights to manufacture and market the generic version of Efudex, Valent's branded drug for the treatment of pre-cancerous lesions. The FTC noted Valeant's acquisition of Ortho, as originally proposed, would have given the company a monopoly in tretinoin emollient creams, which are used to treat fine-line wrinkles. Valeant, under contract with Spear, sells a branded treatment called Refissa as well as a generic version. The FTC's ruling would require Valeant to return all marketing rights of Refissa and the generic treatment to Spear. The FTC rulings will be subject to public comment for 30 days until Jan. 12, after which the FTC will decide whether to make them final. Valeant has been acquisitive lately as it seeks growth. The company, which specializes in neurology and dermatology medicines, proposed to acquire Dermik for about $425 million, while it proposed to acquire Ortho for about $345 million. Valeant shares slid 2.7% to $45.82 in recent trading, outpacing the broader market's downturn. The stock is up 62% year-to-date. -By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com
