Eli Lilly and Co (NYSE:LLY) has won approval to buy Novartis AG's (NYSE:NVS) animal health unit on condition that it divests its Sentinel line of products for treating heartworm in dogs, the Federal Trade Commission said on Monday.
The French company Virbac SA will buy the Sentinel product line now owned by Novartis Animal Health, the FTC said.
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EU regulators had approved Lilly's $5.4 billion takeover of Swiss peer Novartis's animal health business in October.
The FTC had required the divestiture because Eli Lilly's Trifexis and Novartis' Sentinel treatments are the only two canine heartworm products which are given orally once a month, have the same primary medicine, and treat other parasites at the same time.
In announcing the deal in April, Lilly said the transaction would turn its fast-growing Elanco unit from the world's No. 4 animal-health group by revenue to the global No. 2 in a sector that supplies medicines, vaccines and feed additives for farm and domestic animals. The sector's biggest operator is Zoetis, spun off by Pfizer last year.
Novartis in April also said it planned to exit other smaller operations such as vaccines and over-the-counter drugs, while adding higher-margin cancer drugs from GlaxoSmithKline Plc. It plans to focus on three core areas - pharmaceuticals, eye care and generics.
Shares of Eli Lilly were down 2 percent at $70.95 on the New York Stock Exchange.
(Reporting by Diane Bartz; Editing by Jeffrey Benkoe and Bernadette Baum)