1102001 Informal Interpretation

Michael Verne

- Agree.





Tuesday, February 01, 2011 10:41 AM


Verne, B. Michael

Subject: JV/HSR


Thank you for speaking with me yesterdayregarding the HSR reportability of the arrangement described below.

Company A owns an NDA for a branded pharmaceuticalproduct (Product I). Company B owns the NDA for a different brandedpharmaceutical product (product II).

The parties will form a JV which will beowned 75% by Company A, and 25% by Company B. Company A will contribute to theJV a license to Product I, and will retain the right to manufacture thatproduct. Company B will contribute a license to Product It, and will retain theright to manufacture that product. Company B will also make a one-time cashpayment of $100 million to Company B.

Under existing PNO interpretationsincluding Informal Staff Opinion 1001006, the licenses that Company A andCompany B will each contribute to the JV are non-exclusive because, in eachcase, the contributing company retains the right to manufacture the product.The direct acquisition of those non-exclusive licenses is not considered theacquisition of an asset under the HSR Act or

HSR Rules and does not require an HSRfiling.

As we discussed today, because thedirect acquisition of the non-exclusive licenses is not considered theacquisition of an asset, you agreed that the acquisition by Company A andCompany B of shares in the JV entity in connection with its formation (assumingthe JV does not hold non-exempt assets exceeding the relevant HSR threshold), wouldalso be exempt, and therefore no HSR filing would be required for the formationof the JV.

Please confirm that this accuratelyreflects our discussion and your analysis.

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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