Legal Library: Cases and Proceedings

Boehringer Ingelheim agreed to divest five types of animal health products in the United States in order to settle FTC charges that its proposed asset swap with Sanofi would likely be anticompetitive. Under the proposed swap, Boehringer Ingelheim acquired Sanofi’s animal care subsidiary, Merial, valued at $13.53 billion, and Sanofi obtained Boehringer Ingelheim’s consumer health care business unit, valued at $7.98 billion, as well as cash compensation of $5.54 billion. The FTC’s complaint alleges that without the divestitures the proposed asset swap would harm competition in the U.S. markets for various vaccines for companion animals (pets) and certain parasite control products for cattle and sheep. The proposed consent order preserves competition by requiring Boehringer Ingelheim to divest the companion animal vaccines to Eli Lilly and the company’s Elanco Animal Health division, and the parasite control products to Bayer AG.

Abbott Laboratories agreed to divest two medical device businesses to settle FTC charges that its proposed $25 billion acquisition of St. Jude Medical, Inc. would likely be anticompetitive. The FTC’s complaint alleges that without a remedy, the proposed acquisition would harm competition in the U.S. markets for vascular closure devices, which are used to close holes in arteries from the insertion of catheters, and for “steerable” sheaths, which are used to guide catheters for treating heart arrhythmias. Without a remedy, the merger will cause significant harm to competition in these two markets. The consent order requires the parties to divest to Tokyo-based medical device maker Terumo Corporation all rights and assets related to St. Jude’s vascular closure device business and Abbott’s steerable sheath business. The order requires both companies to assist Terumo with establishing its manufacturing capabilities. Under the order, Abbott is also required to notify the FTC if it intends to acquire lesion-assessing ablation catheter assets from Advanced Cardiac Therapeutics, known as ACT. Lesion-assessing ablation catheters provide feedback to physicians regarding the force being applied by the catheter or the temperature of the ablation target. Currently, only St. Jude and one other company provide lesion assessing ablation catheters in the United States. Abbott and ACT have formed a partnership to develop these catheters. After the acquisition of St. Jude, if Abbott acquired lesion-assessing ablation catheter assets from ACT, it could eliminate additional competition that would result from an independent ACT.

Valeant Pharmaceuticals, the parent of Bausch + Lomb, agreed to sell Paragon Holdings I, Inc. to settle charges that its May 2015 acquisition of Paragon reduced competition for the sale of FDA-approved buttons used for three types of gas permeable, or GP, lenses: orthokeratology lenses, worn to reshape the cornea; large-diameter scleral lenses, which cover the white of the eye and are used after eye surgery, for corneal transplants, and to treat eye disease; and general vision correction lenses. Valeant will sell Paragon in its entirety to a newly created entity, Paragon Companies LLC, headed by the former president of Paragon, Joe Sicari. Under the settlement, Paragon Companies also will acquire the assets of Pelican Products LLC – a contact lens packaging company that Valeant acquired after its purchase of Paragon – that is the only producer of FDA-approved vials used for shipping some GP lenses.

As part of a $90 million proposed settlement, T-Mobile is refunding customers who were unfairly billed third-party charges by the company.

T-Mobile has been contacting all of its current and former crammed customers to let them know about the refund program and claims process. Customers can get more information about T-Mobile’s refund program at www.t-mobilerefund.com.

Investment firm founder Fayez Sarofim agreed to pay $720,000 in civil penalties to resolve allegations that he violated the Hart-Scott-Rodino Act by failing to report stock purchases from several issuers between 2001 and 2012. The HSR Act exempts acquisitions of up to ten percent of voting securities if they are made solely for investment purposes, but this exemption is not available to individuals who serve on the board of directors of the issuer at the time the shares are acquired. The FTC alleged that because Sarofim was serving as a board member at each company for which he acquired voting shares, he was ineligible for an investment-only exemption from filing and his failure to report a series of transactions to U.S. antitrust authorities violated the Act. From 2001 to 2012, Sarofim acquired voting shares of energy infrastructure company Kinder Morgan, Inc., crossing three different filing thresholds without making the filings required under the HSR Act. In 2007, he acquired voting shares in insurance holding company Kemper Corporation and did not file as required under the Act. According to the complaint, he was already serving as a board member at Kinder Morgan and at Kemper’s predecessor company, Unitrin Inc., before he made the respective stock purchases.