UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the matter of

ZENECA GROUP PLC, a corporation.

File No. 991-0089

AGREEMENT CONTAINING CONSENT ORDER

The Federal Trade Commission ("Commission"), having initiated an investigation of the proposed merger ("Merger") of Zeneca Group PLC ("Zeneca") and Astra AB ("Astra"), and it now appearing that Zeneca, hereinafter sometimes referred to as "Proposed Respondent," is willing to enter into an agreement containing an order to transfer certain assets and providing for other relief:

IT IS HEREBY AGREED by and between Proposed Respondent, by its duly authorized officers and attorneys, and counsel for the Commission that:

1. Proposed Respondent Zeneca Group PLC is a corporation organized, existing and doing business under and by virtue of the laws of England, with its office and principal place of business located at 15 Stanhope Gate, London W1Y 6LN, England.

2. Proposed Respondent admits all the jurisdictional facts set forth in the draft of complaint here attached.

3. Proposed Respondent waives:

a. any further procedural steps;

 

b. the requirement that the Commission's decision contain a statement of findings of fact and conclusions of law;

 

c. all rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement; and

 

d. any claim under the Equal Access to Justice Act.

4. Proposed Respondent shall submit within forty-five (45) days of the date this Agreement is signed by the Proposed Respondent, an initial report, pursuant to Section 2.33 of the Commission's Rules, signed by the Proposed Respondent setting forth in detail the manner in which the Proposed Respondent is complying and will comply with this Order. Such report will not become part of the public record unless and until the accompanying Agreement and Order are accepted by the Commission for public comment.

5. This Agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this Agreement is accepted by the Commission it, together with the draft of complaint contemplated thereby, will be placed on the public record for a period of sixty (60) days and information in respect thereto publicly released. The Commission thereafter may either withdraw its acceptance of this Agreement and so notify the Proposed Respondent, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision, in disposition of the proceeding.

6. This Agreement is for settlement purposes only and does not constitute an admission by Proposed Respondent that the law has been violated as alleged in the draft of complaint here attached, or that the facts as alleged in the draft complaint, other than jurisdictional facts, are true.

7. This Agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of § 2.34 of the Commission's Rules, the Commission may, without further notice to the Proposed Respondent, (1) issue its complaint corresponding in form and substance with the draft of complaint here attached and its decision containing the following Order in disposition of the proceeding and (2) make information public with respect thereto. When so entered, the Order shall have the same force and effect and may be altered, modified or set aside in the same manner and within the same time provided by statute for other orders. The Order shall become final upon service. Delivery by the United States Postal Service of the complaint and decision containing the agreed-to Order to Proposed Respondent's counsel named in this Agreement shall constitute service. Proposed Respondent waives any right it may have to any other manner of service. The complaint may be used in construing the terms of the Order, and no agreement, understanding, representation, or interpretation not contained in the Order or the Agreement may be used to vary or contradict the terms of the Order.

8. By signing this Agreement Containing Consent Order, Proposed Respondent represents that it can accomplish the full relief contemplated by the Order.

9. Proposed Respondent has read the proposed complaint and Order contemplated hereby. Proposed Respondent understands that once the Order has been issued, it will be required to file one or more compliance reports showing that it has fully complied with the Order. Proposed Respondent agrees to comply with the terms of the proposed Order from the date Proposed Respondent signs this Agreement. Proposed Respondent further understands that it may be liable for civil penalties in the amount provided by law for each violation of the Order after it becomes final.

ORDER

IT IS ORDERED that, as used in this Order, the following definitions shall apply:

A. "Zeneca" means Zeneca Group PLC, its directors, officers, employees, agents, representatives, successors (including but not limited to AstraZeneca) and assigns; its subsidiaries, divisions, groups and affiliates controlled by Zeneca Group PLC (including but not limited to Zeneca Limited) and the respective directors, officers, employees, agents, representatives, successors, and assigns of each. Following the Merger, Zeneca includes Astra AB, its directors, officers, employees, agents, representatives, successors, and assigns; its subsidiaries, divisions, groups and affiliates controlled by Astra AB, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

B. "Astra" means Astra AB, a corporation organized, existing and doing business under and by virtue of the laws of Sweden, with its office and principal place of business located at S151 85 Södertälje, Sweden.

C. "Respondent" means Zeneca.

D. "Commission" means the Federal Trade Commission.

E. "Chiroscience" means Chiroscience Group plc, a corporation organized, existing and doing business under and by virtue of the laws of England with its office and principal place of business located at 283 Cambridge Science Park, Milton Road, Cambridge CB4 4WE, England; Darwin Discovery Limited, a corporation organized, existing and doing business under and by virtue of the laws of England with its office and principal place of business located at 283 Cambridge Science Park, Milton Road, Cambridge CB4 4WE, England; and Chiroscience R&D Limited, a corporation organized, existing and doing business under and by virtue of the laws of England with its office and principal place of business located at 283 Cambridge Science Park, Milton Road, Cambridge CB4 4WE, England.

F. "Chirocaine™ License" means the "Patent and Know-How Licence Relating to Levobupivacaine and Trade Mark Assignment Relating to 'Chirocaine,'" dated March 30, 1998, between Chiroscience Group plc and Darwin Discovery Limited and Zeneca Limited.

G. "Chiroscience/Zeneca Agreement" means the "Surrender and Termination of Patent and Know-How Licence Relating to Levobupivacaine and Trade Mark Assignment Relating to 'Chirocaine,'" dated March 12, 1999, between Chiroscience Group plc, Darwin Discovery Limited, Zeneca Group PLC, and Zeneca Limited; the Agreement Amending Share Subscription Agreement; and the "Agreement Terminating Supply Agreement of 30 March 1998," dated March 12, 1999, between Chiroscience R&D Limited and Zeneca Limited.

H. "Agreement Amending Share Subscription Agreement" means the "Agreement Amending Share Subscription Agreement of 30 March 1998," dated March 12, 1999 between Chiroscience Group plc and Zeneca Limited.

I. "Chiroscience/Zeneca Agreement End Date" means the "End Date" as defined in clause 11.3 of the Chiroscience/Zeneca Agreement.

J. "FDA" means the United States Food and Drug Administration.

K. "Chirocaine™" means the chemical compound (S)-1-butyl-(N)-(2,6-dimethylphenyl)-2-piperidinecarboxamide known as levobupivacaine and having CAS registration number 27262-47-1 in all its forms including base and hydrochloride salt.

L. "Chirocaine™ Product" means Chirocaine™ and any "Licensed Products" as defined in the Chiroscience/Zeneca Agreement.

M. "Chirocaine™ Improvements" means any "Improvement" as defined in the Chiroscience/Zeneca Agreement.

N. "Chirocaine™ Information" means all "Chirocaine Know-how" as defined in the Chiroscience/Zeneca Agreement.

O. "Chirocaine™ Intellectual Property Rights" means the "Intellectual Property Rights" as defined in the Chiroscience/Zeneca Agreement.

P. "Chirocaine™ Assets" means:

1. the Chirocaine™ Product;

 

2. the Chirocaine™ Improvements;

 

3. the Chirocaine™ Information;

 

4. the Chirocaine™ Intellectual Property Rights; and

 

5. the Chirocaine™ License.

Q. "Chiroscience Shares" means all of the stock, share capital, equity or other interest of Chiroscience owned by Respondent.

R. "Merger" means the acquisition by Zeneca of all or substantially all of the share capital of Astra.

IT IS FURTHER ORDERED that:

A. Within ten (10) business days after the date the Commission accepts this Agreement Containing Consent Order for public comment, Respondent shall transfer and surrender, absolutely and in good faith, all the Chirocaine™ Assets, in accordance with the Chiroscience/Zeneca Agreement.

B. Within four (4) months after the expiration of the Agreement Amending Share Subscription Agreement, Respondent shall divest, absolutely and in good faith, the Chiroscience Shares. Pending such divestiture, Respondent shall not, directly or indirectly: (i) exercise dominion or control over, or otherwise seek to influence, the management, direction or supervision of the business of Chiroscience; (ii) seek or obtain representation on the Board of Directors of Chiroscience; (iii) exercise any voting rights attached to the Chiroscience Shares; (iv) seek or obtain access to any confidential or proprietary information of Chiroscience; or (v) take any action or omit to take any action in a manner that would be incompatible with the status of Respondent as a passive investor in Chiroscience.

C. Pending the transfer and surrender of the Chirocaine™ Assets, Respondent shall take such actions as are necessary to maintain the viability and marketability of the Chirocaine™ Assets, and to prevent the destruction, deterioration, or impairment of any of the Chirocaine™ Assets. Respondent shall also take such actions as are necessary to maintain the viability and marketability of the Chirocaine™ Assets, and to prevent the destruction, deterioration, or impairment of any of the Chirocaine™ Assets, in accordance with the Chiroscience/Zeneca Agreement.

D. Respondent shall comply with all terms of the Chiroscience/Zeneca Agreement, and such agreement is incorporated by reference into this Order and made part hereof as Confidential Appendix I. Any failure by Respondent to comply with the requirements of such agreement may constitute a failure to comply with this Order.

E. The purpose of this Order is to ensure the continued use of the Chirocaine™ Assets in the same business in which the Chirocaine™ Assets are engaged at the time of the Merger, and to remedy the lessening of competition resulting from the Merger as alleged in the Commission's complaint.

IT IS FURTHER ORDERED that:

A. At any time after Respondent signs the Agreement Containing Consent Order in this matter, the Commission may appoint an Interim Trustee to assure that Respondent expeditiously performs its responsibilities as required by this Order and the Chiroscience/Zeneca Agreement.

B. If an Interim Trustee is appointed pursuant to Paragraph III.A. of this Order, Respondent shall consent to the following terms and conditions regarding the powers, duties, authorities, and responsibilities of the Interim Trustee:

1. The Commission shall select the Interim Trustee, subject to the consent of Respondent, which consent shall not be unreasonably withheld. If Respondent has not opposed, in writing, including the reasons for opposing, the selection of any proposed trustee within ten (10) days after notice by the staff of the Commission to Respondent of the identity of any proposed trustee, Respondent shall be deemed to have consented to the selection of the proposed trustee.

 

2. The Interim Trustee shall have the power and authority to monitor Respondent's compliance with the terms of this Order and with the terms of the Chiroscience/Zeneca Agreement, and shall exercise such power and authority and carry out the duties and responsibilities of the Interim Trustee in a manner consistent with the purposes of this Order and in consultation with the Commission.

 

3. Within ten (10) days after appointment of the Interim Trustee, Respondent shall execute a trust agreement that, subject to the prior approval of the Commission, confers on the Interim Trustee all the rights and powers necessary to permit the Interim Trustee to monitor Respondent's compliance with the terms of this Order and with the terms of the Chiroscience/Zeneca Agreement in a manner consistent with the purposes of this Order.

 

4. The Interim Trustee shall serve until the Chiroscience/Zeneca Agreement End Date; provided, however, the Commission may extend this period as may be necessary or appropriate to accomplish the purposes of this Order.

 

5. The Interim Trustee shall have full and complete access to Respondent's personnel, books, records, documents, facilities and technical information relating to the research, development, manufacture, importation, distribution and sale of Chirocaine™ and any Chirocaine™ Product, or to any other relevant information, as the Interim Trustee may reasonably request, including, but not limited to, all documents and records kept in the normal course of business that relate to the manufacture of Chirocaine™ or any Chirocaine™ Product and all materials and information relating to FDA and other government or regulatory approvals. Respondent shall cooperate with any reasonable request of the Interim Trustee. Respondent shall take no action to interfere with or impede the Interim Trustee's ability to monitor Respondent's compliance with this Order and the Chiroscience/Zeneca Agreement.

 

6. The Interim Trustee shall serve, without bond or other security, at the expense of Respondent, on such reasonable and customary terms and conditions as the Commission may set. The Commission may, among other things, require the Interim Trustee to sign an appropriate confidentiality agreement relating to Commission materials and information received in connection with performance of the Interim Trustee's duties. The Interim Trustee shall have authority to employ, at the expense of Respondent, such consultants, accountants, attorneys and other representatives and assistants as are reasonably necessary to carry out the Interim Trustee's duties and responsibilities. The Interim Trustee shall account for all expenses incurred, including fees for his or her services, subject to the approval of the Commission.

 

7. Respondent shall indemnify the Interim Trustee and hold the Interim Trustee harmless against any losses, claims, damages, liabilities or expenses arising out of, or in connection with, the performance of the Interim Trustee's duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparations for, or defense of, any claim whether or not resulting in any liability, except to the extent that such liabilities, losses, damages, claims, or expenses result from misfeasance, gross negligence, willful or wanton acts, or bad faith by the Interim Trustee.

 

8. If the Commission determines that the Interim Trustee has ceased to act or failed to act diligently, the Commission may appoint a substitute Interim Trustee in the same manner as provided in Paragraph III.A.1. of this Order.

 

9. The Commission may on its own initiative or at the request of the Interim Trustee issue such additional orders or directions as may be necessary or appropriate to assure compliance with the requirements of this Order and the Chiroscience/Zeneca Agreement.

 

10. The Interim Trustee shall obtain and evaluate reports submitted to it by Chiroscience with respect to the performance of Respondent's obligations under the Chiroscience/Zeneca Agreement. The Interim Trustee shall report in writing to the Commission every two (2) months from the date the Interim Trustee is appointed concerning compliance by Respondent and Chiroscience with the provisions of this Order and the Chiroscience/Zeneca Agreement until the Chiroscience/Zeneca Agreement End Date.

IT IS FURTHER ORDERED that within thirty (30) days after the date this Order becomes final and every ninety (90) days thereafter until Respondent has fully complied with the provisions of this Order, Respondent shall submit to the Commission a verified written report setting forth in detail the manner and form in which it intends to comply, is complying, and has complied with this Order. Respondent shall include in such compliance reports, among other things that are required from time to time, a full description of the efforts being made to comply with the Order.

IT IS FURTHER ORDERED that Respondent shall notify the Commission at least thirty (30) days prior to any proposed change in the corporate Respondent that may affect compliance obligations arising out of the Order, such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in the corporation.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order, upon written request, Respondent shall permit any duly authorized representative of the Commission:

A. Access, during office hours and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and other records and documents in the possession or under the control of Respondent relating to any matters contained in this Order; and

 

B. Upon five days' notice to any Respondent and without restraint or interference from it, to interview officers, directors, employees, agents or independent contractors of Respondent, who may have counsel present, regarding such matters.

Signed this _____ day of March, 1999.