Mylan will sell rights and assets related to seven generic drugs to Alvogen Group in order to settle a complaint by the U.S. Federal Trade Commission (FTC) related to the company’s proposed $27 billion hostile acquisition of Perrigo.

In return, the FTC has cleared the deal, leaving just the final hurdle of approval by at least 80% of Perrigo shareholders by November 13—an approval that remains uncertain, and which Perrigo continues to oppose.

“We are delighted to have received FTC clearance, making our offer for Perrigo now unconditional other than the one final step, which now rests solely in the hands of Perrigo shareholders,” Robert Coury, Mylan’s executive chairman, said in a statement.

The FTC announced the settlement yesterday, months after the agency alleged that Mylan’s proposed purchase was likely to harm competition in the U.S. for the seven generic drugs.

Four of the generics are now marketed by Mylan and Perrigo:

  • Bromocriptine mesylate for conditions that include type 2 diabetes and Parkinson’s disease

 

  • Clindamycin phosphate/benzoyl peroxide for acne

 

  • Liothyronine sodium for hypothyroidism, as well as treatment or prevention of enlarged thyroid glands

 

  • Polyethylene glycol 3350, a laxative, for occasional constipation.

 

Mylan also agreed to sell off three generics for which it or Perrigo either had plans to launch, or the capability of developing future products. The three are: Acyclovir for slowing the growth and spread of the herpes virus; Hydromorphone hydrochloride for moderate to severe pain in narcotic-tolerant patients; and Scopolamine for preventing symptoms associated with motion sickness, and helping patients recover from anesthesia and surgery.

In an analysis of the deal earlier this year, the FTC said that Mylan and Amneal Pharmaceuticals now hold ANDAs and supply acyclovir 5% ointment, while Perrigo was “one of a limited number of suppliers likely to enter this market in the near future.”

Mylan was also “likely to enter” the market for Hydromorphone hydrochloride, where Perrigo and Allergan hold ANDAs for 8 mg, 12 mg, and 16 mg extended release tablets, the FTC said.

As for Scopolamine, the FTC noted that Perrigo holds the only approved ANDA for the generic version of the branded drug Transderm Scop, adding that Mylan was one of a limited number of other suppliers “likely to enter this market in the near future.”

Under Mylan’s offer, Perrigo shareholders would receive $75 in cash and 2.3 Mylan ordinary shares for each Perrigo ordinary share. Mylan officially commenced its formal offer to acquire all outstanding ordinary shares of Perrigo on September 14. The offer expires 8 a.m. ET on November 13.

Perrigo has called Mylan’s offer inadequate, with its CEO Joseph Papa taking issue with Mylan’s corporate governance. In response, Mylan has promised to allow shareholders of a combined Mylan-Perrigo vote on governance, including how directors are nominated and elected, as well as whether to keep Mylan’s “stitching” structure, in which an independent foundation retains functions that include preventing takeover efforts.

However, on Monday, Perrigo played down the potential for change and restated its opposition to the deal, in a statement by president, CEO and chairman Joseph C. Papa emailed to Bloomberg. “Mylan merely catalogues areas where serious reform is needed, and offers highly contingent and illusory promises without any assurance that any change will ever be made.”

Perrigo has also questioned Mylan’s assertion that the combined company could achieve $800 million in annual cost reductions or synergies—and complained about Mylan’s plan to operate Perrigo as a separate subsidiary if more than 50% but less than 80% of shareholders approve the deal.

On Monday, Perrigo disclosed in a quarterly regulatory filing that it had incurred $29 million in consulting and legal fees related to its defense against Mylan’s offer—including $15.6 million in the three months ending September 26.

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