2504003 Informal Interpretation

We have a clarifying question regarding the scope of the top customer reporting requirement in connection with the Overlap Description.

Consider the following situation:

• The transaction is an exclusive license that has not been used to generate any revenue worldwide, treated as an asset acquisition under the HSR rules.
• The exclusive license is granted globally, exclusive of the Chinese mainland, Hong Kong, Macau, and Taiwan.
• The Acquiring Person is a global pharmaceutical manufacturer, with revenues in both the United States and outside of the United States.
• The Acquired Entity does not have any revenues.
• There is no NAICS code overlap.
• The Overlap Description identifies marketed pharmaceutical products sold by the Acquiring Person (both in the United States and abroad) as products that could compete with clinical-stage products being developed by the Acquired Entity using the IP that is subject to the exclusive license.

In such a case, must the Acquiring Person report its top customers for its overlapping marketed pharmaceutical products by revenue globally, including global categories of customers (such as foreign governments, foreign health insurance schemes, or foreign hospital systems) that are both entirely foreign and lacking a US customer category analog (and which would result in an entirely foreign list of top customers in each category)?

We believe that it would be appropriate to report top customers (and categories) for sales made in or into the United States of the Acquiring Person’s overlapping marketed pharmaceutical products. We have considered that the Acquiring Person template form on the PNO website is similarly prepared on behalf of a pharmaceutical manufacturer Acquiring Person and identifies only a single customer category (“National distributors of oncological pharmaceuticals and related products”) which appears to encompass US-only customers, perhaps reflecting the way in which pharmaceutical distribution occurs in the United States.