Bristol-Myers Squibb Co. agreed to divest one of Celgene Corp.’s most lucrative drugs in order to close their planned $74 billion merger.

Under an agreement with the Federal Trade Commission, Bristol-Myers will sell off the psoriasis pill Otezla to appease antitrust regulators’ concerns, the company said in a statement.

Bristol-Myers shares fell as much as 7% to $45.89 in New York, the biggest intraday drop since the deal was announced on Jan. 3. Celgene declined as much as 4.7% to $94.26.

Otezla is a major product for Celgene, bringing in $1.86 billion last year, and was seen as an important driver of future growth as the two companies knit together their businesses. Bristol-Myers has been battling Merck & Co. for dominance in the field of cancer immunotherapy, while Celgene’s blockbuster Revlimid for blood cancers is expected to face lower-priced competitors in coming years.

Otezla has as much as a decade of strong sales ahead, according to analysts’ estimates surveyed by Bloomberg. Now, a rival drugmaker will get the rights to the pill, potentially at a discounted price. Johnson & Johnson’s Janssen unit has said it’s interested in pursuing an oral psoriasis treatment through an acquisition or its own pipeline.

Bristol-Myers is researching another type of therapy for psoriasis known as a TYK2-inhibitor that would likely compete with Celgene’s blockbuster drug. While the drugs work differently, the overlap raised concerns from regulators, according to the statement. By divesting Otezla, Bristol-Myers is electing to sell a blockbuster in favor of a promising, though still experimental, therapy.

“Divesting Otezla a surprise to us and removes one of the newco’s growth drivers,” Vamil Divan, an analyst with Credit Suisse Group AG, said in a note to clients.

Bristol-Myers also said that the deal will take longer to close than it had expected. Its new target is the end of 2019 or early 2020, pushed back from a previous goal of Sept. 30. The FTC review is ongoing, the company said, and European regulators will review it as well.

“Bristol-Myers Squibb is committed to working with regulatory authorities around the world on the proposed combination with Celgene,” the company said in the statement. It plans to use the proceeds to pay off debt.

The increased oversight spooked investors in another biotechnology company facing regulatory review. Earlier this month, the FTC requested more information about Spark Therapeutics Inc.’s proposed sale to Roche Holding AG, sending the gene therapy company’s shares falling. Spark’s shares dropped as much as 3.6% to $101.25 on the news of the Otezla divestiture.

In a research note, Jefferies analyst Michael Yee said it remains to be seen what the news could mean for the industry.

“We continue to be mindful and are carefully watching to get a better handle on if we are in a more aggressive FTC era for biotech,” he wrote in a note to clients.

Separately, Bristol-Myers said that its cancer drug Opdivo, its No. 2 product, had failed a clinical trial treating liver cancer patients. The medicine faces multiple competitors that use the same mechanism to help the immune system attack tumors, and Bristol-Myers’ rivals have been attempting to get the drugs approved in as many different types of cancer as possible.