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Lawsuit over CSL's purchase of Talecris

The US FTC has authorised a lawsuit to block CSL from acquiring Talecris Biotherapeutics in a deal worth $3.1bn on the grounds of anticompetitiveness

The US Federal Trade Commission (FTC) has authorised a lawsuit to block Australian biotherapy company CSL from acquiring Talecris Biotherapeutics in a deal worth $3.1bn on the grounds of anticompetitiveness.

The takeover of Talecris, the world's third-largest producer of plasma-derivative protein therapies, by CSL, the second most prolific producer in the field, would damage significantly competition in this marketplace and violate federal antitrust laws.

"Now more than ever, it is critical that consumers benefit from vigorous competition in the healthcare sector – both to ensure competitive prices and to drive further innovation," said Richard Feinstein, director of the FTC's Bureau of Competition.

"Substantial consolidation has already occurred in the plasma protein industry, and these highly concentrated markets are already exhibiting troubling signs of coordinated behaviour. The proposed acquisition would further consolidate the industry and increase the likelihood of collusion."

CSL produces and sells biotherapies used to treat several rare primary immune deficiency diseases, coagulation disorders and inherited respiratory disease. Its wholly-owned US subsidiary, CSL Behring, owns more than 70 plasma collection facilities in the US and Germany, as well as three manufacturing sites in Switzerland, Germany and Illinois.

Talecris acquired Bayer's worldwide plasma business in 2005 and now owns a number of plasma collection centres in the US and manufacturing facilities in New York and North Carolina.

The planned $3.1bn merger of the two companies on August 12, 2009 would see CSL acquire all outstanding voting securities of Talecris. The acquisition would reduce US competitors for the plasma-derivative protein therapies Immune globulin and Albumin from five to four, and see Baxter and CSL, the top two competitors, account for more than 80 per cent of each market. Additionally, the number of competitiors for the therapies Rho-D and Alpha-1 would be reduced from three to two.

Over the past 19 years, competition in the plasma-derivative protein market has reduced from 13 to five – Baxter, CSL, Talecris, Grifols and Octapharma. The FTC's complaint claims that firms in the sector have used consolidation to limit supply and drive higher prices. The complaint also claims that significant regulatory, intellectual property and capital requirement barriers to entry and expansion exist in these markets.

In addition to approving the administrative complaint seeking to block the deal, the FTC has authorised staff to apply for a preliminary injunction to stop the transaction, pending the completion of the administrative trial, in the federal district court in Washington DC.

28th May 2009

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