UNITED
STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
BAXTER INTERNATIONAL INC.,
a corporation.
File No. 971-0002
AGREEMENT CONTAINING CONSENT
ORDER
The Federal Trade Commission ("Commission"),
having initiated an investigation of the Acquisition of
certain stock of Immuno International AG
("Immuno") by Baxter International Inc.
("Baxter"), and it now appearing that Baxter,
hereinafter sometimes referred to as "Proposed
Respondent," is willing to enter into an Agreement
Containing Consent Order ("Agreement") to
divest certain assets, license certain assets, contract
manufacture certain products, and provide for certain
other relief:
IT IS HEREBY AGREED by and between
Proposed Respondent, by its duly authorized officers and
its attorneys, and counsel for the Commission that:
- 1. Proposed Respondent Baxter is a corporation
organized, existing, and doing business under and
by virtue of the laws of the state of Delaware,
with its principal place of business located at
One Baxter Parkway, Deerfield, Illinois 60015.
-
- 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 claims under the Equal Access to
Justice Act.
- 4. 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.
-
- 5. This Agreement is for settlement purposes only
and does not constitute an admission by the
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.
-
- 6. 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 Section
2.34 of the Commission's Rules, the Commission
may, without further notice to 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 to divest and license 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 address as stated 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.
-
- 7. 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 it has fully
complied with the order. 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
I.
IT IS ORDERED that, as used in this
order, the following definitions shall apply:
- A. "Respondent" or "Baxter"
means Baxter International Inc., its
predecessors, subsidiaries, divisions, groups and
affiliates controlled by Baxter International
Inc., and their respective directors, officers,
employees, agents and representatives, and their
respective successors and assigns. Baxter also
includes Immuno International AG.
-
- B. "Immuno" means Immuno International
AG, a corporation organized, existing and doing
business under and by virtue of the laws of
Switzerland, with its principal place of business
located at Zollikerstrasse 60, CH-8702, Zollikon,
Switzerland.
-
- C. "Commission" means the Federal Trade
Commission.
-
- D. "FDA" means the United States Food
and Drug Administration.
-
- E. "Acquisition" means the acquisition
by Baxter of the majority of Immuno voting stock.
-
- F. "Factor VIII Inhibitor Treatments"
means the activated prothrombin complex
concentrates used to treat Factor VIII antibodies
in hemophiliacs, approved by the FDA for sale in
the United States.
-
- G. "Autoplex" means the Factor VIII
Inhibitor Treatments marketed by Baxter.
-
- H. "FEIBA" means the Factor VIII
Inhibitor Treatments marketed by Immuno.
-
- I. "Autoplex Assets" means all of
Baxter's assets and rights relating solely to the
research, development, manufacture or sale of
Factor VIII Inhibitor Treatments sold under
the trade names Autoplex or Autoplex T, including
all arrangements necessary to meet the
requirements of Paragraph II.A. of this order.
"Autoplex Assets" include, but are not
limited to, all machinery, fixtures, equipment
and other tangible personal property, rights to
brand or trade names, formulations, inventory,
patents, trade secrets, technology, know-how,
specifications, designs, drawings, processes,
production information, manufacturing
information, testing and quality control data,
research materials, technical information,
distribution information, customer lists,
software, information stored on management
information systems (and specifications
sufficient for the Acquirer to use such
information) and all data, contractual rights,
materials and information relating to FDA and
other government or regulatory approvals for the
United States.
-
- J. "FEIBA Assets" means all of Immuno's
assets and rights relating solely to the
research, development, manufacture or sale of
Factor VIII Inhibitor Treatments sold by Immuno,
prior to the Acquisition, under the trade name
FEIBA, including all arrangements necessary to
meet the requirements of Paragraph IV.A. of this
order. "FEIBA Assets" include, but are
not limited to, all machinery, fixtures,
equipment and other tangible personal property,
rights to brand or trade names, formulations,
inventory, patents, trade secrets, technology,
know-how, specifications, designs, drawings,
processes, production information, manufacturing
information, testing and quality control data,
research materials, technical information,
distribution information, customer lists,
software, information stored on management
information systems (and specifications
sufficient for the New Acquirer to use such
information) and all data, contractual rights,
materials and information relating to FDA and
other government or regulatory approvals for the
United States.
-
- K. "Divested Inhibitor Assets" means
either the Autoplex Assets or the FEIBA Assets,
as applicable.
-
- L. "Acquirer" means the entity to whom
Baxter shall divest the Autoplex Assets pursuant
to Paragraph II. of this order.
-
- M. "New Acquirer" means the entity to
whom the trustee shall divest either the Autoplex
Assets or the FEIBA Assets pursuant to Paragraph
IV. of this order.
-
- N. "Fibrin Sealant" means a topical
biological product, in any form, including, but
not limited to, freeze-dried and frozen, used to
control bleeding or seal tissues together.
-
- O. "Immuno Fibrin Sealant Assets"
means all of Immuno's assets and rights
relating to the research, development,
manufacture or sale of any Fibrin Sealant
developed by Immuno, as of the date this order
becomes final. "Immuno Fibrin Sealant
Assets" include, but are not limited to, all
formulations, patents, patent applications, trade
secrets, technology, know-how, specifications,
designs, drawings, processes, production
information, manufacturing information, testing
and quality control data, research materials,
technical information, distribution information,
customer lists, software, information stored on
management information systems (and
specifications sufficient for the Fibrin Sealant
Licensee to use such information) and all data,
contractual rights, materials and information
relating to FDA and other government or
regulatory approvals for the United States.
-
- P. "Fibrin Sealant Licensee" means the
entity to whom Baxter shall license the Immuno
Fibrin Sealant Assets pursuant to Paragraphs V.
or VII. of this order.
-
- Q. "Contract Manufacture" means the
manufacture of Factor VIII Inhibitor Treatments
or Fibrin Sealant, as applicable, by Baxter for
sale to the Acquirer, the New Acquirer or the
Fibrin Sealant Licensee, as applicable.
-
- R. "Cost" means the manufacturer's
average direct per unit cost of manufacturing
Factor VIII Inhibitor Treatments or Fibrin
Sealant, as applicable, plus costs of
manufacturing Factor VIII Inhibitor Treatments or
Fibrin Sealants, as applicable, that are directly
attributable to FDA regulatory, quality control
and compliance.
-
II.
IT IS FURTHER ORDERED that:
- A. Within four (4) months of the date Baxter
signed the Agreement Containing Consent Order in
this matter, Baxter shall divest, absolutely and
in good faith, the Autoplex Assets, effect
all arrangements, including, but not limited to,
the licensing of any Baxter patents and know-how
not related solely to the research, development,
manufacture or sale of Factor VIII Inhibitor
Treatments, necessary to enable the Acquirer to
manufacture and sell a Factor VIII Inhibitor
Treatment using the Divested Inhibitor Assets,
and execute an agreement that includes the
provisions required by Paragraph II.C. of this
order.
-
- B. The Autoplex Assets shall be divested only to,
and the agreement executed only with, an Acquirer
that receives the prior approval of the
Commission and only in a manner that receives the
prior approval of the Commission. In the event
that the Acquirer does not choose to acquire all
of the physical assets included in the Autoplex
Assets because the Acquirer does not need such
physical assets in order to engage in the
manufacture and sale of Factor VIII Inhibitor
Treatments, Respondent shall not be required to
divest such assets. The purpose of the
divestiture is to ensure the continued
competition between Autoplex and FEIBA in the
United States, in the same manner in which these
products would compete absent the Acquisition,
and to remedy the lessening of competition
resulting from the proposed Acquisition as
alleged in the Commission's complaint.
-
- C. Respondent's agreement with the Acquirer or
New Acquirer (hereinafter "Divestiture
Agreement") shall include the following and
Baxter shall commit to satisfy the following:
-
- 1. Baxter shall grant to the Acquirer the
right of reference to the data contained
in Baxter's Product License Application
("PLA") No. 91-0649 (or to the
New Acquirer the right of reference to
the data contained in Immuno's PLA No.
82-027) for the Divested Inhibitor Assets
on file with the FDA. Baxter shall make
all necessary filings with the FDA
authorizing the FDA to refer to the
applicable PLA for the data in support of
the PLA of the Acquirer or New Acquirer
for a Factor VIII Inhibitor Treatment,
including any supplemental PLAs or
related PLAs. Provided, however, that the
right of reference granted in this
subparagraph does not constitute a
general release of the data in Baxter's
PLA No. 91-0649 (or Immuno's PLA No.
87-027), including any supplemental PLAs
or related PLAs, except as it may appear
in labeling.
-
- 2. Baxter shall Contract Manufacture and
deliver to the Acquirer or the New
Acquirer, in a timely manner and under
reasonable terms and conditions, a supply
of Factor VIII Inhibitor Treatments
specified in the Divestiture Agreement,
at Baxter's Cost for a period not to
exceed three (3) years from the date the
Divestiture Agreement is approved, or
four (4) months after the date the
Acquirer or the New Acquirer obtains all
necessary FDA approvals to manufacture
Factor VIII Inhibitor Treatments for sale
in the United States, whichever is
earlier; provided, however,
that the time period may be extended by
the Commission in twelve (12) month
increments for a period not to exceed an
additional forty-eight (48) months if the
trustee appointed pursuant to Paragraph
III. of this order submits to the
Commission the certification provided for
in subparagraph II.C.8. of this order.
-
- 3. Baxter shall make representations and
warranties to the Acquirer or the New
Acquirer that the Factor VIII Inhibitor
Treatments that are Contract Manufactured
by Baxter for the Acquirer or the New
Acquirer meet the FDA approved
specifications therefor and are not
adulterated or misbranded within the
meaning of the Food, Drug and Cosmetic
Act, 21 U.S.C. § 321, et seq.
Baxter shall agree to indemnify, defend
and hold the Acquirer or the New Acquirer
harmless from any and all suits, claims,
actions, demands, liabilities, expenses
or losses alleged to result from the
failure of the Factor VIII Inhibitor
Treatments Contract Manufactured by
Baxter pursuant to subparagraph II.C.2.
of this order to meet FDA specifications.
This obligation shall be contingent upon
the Acquirer or the New Acquirer giving
Baxter prompt, adequate notice of such
claim, cooperating fully in the defense
of such claim, and permitting Baxter to
assume the sole control of all phases of
the defense and/or settlement of such
claim, including the selection of
counsel. This obligation shall not
require Baxter to be liable for any
negligent act or omission of the Acquirer
or the New Acquirer, or for any
representations and warranties, express
or implied, made by the Acquirer or the
New Acquirer that exceed the
representations and warranties made by
Baxter to the Acquirer or the New
Acquirer.
-
- 4. During the term of Contract
Manufacturing, upon reasonable request by
the Acquirer, the New Acquirer or the
trustee appointed pursuant to Paragraph
III. of this order, Baxter shall make
available to the trustee, or its agents
or representatives, all records kept in
the normal course of business that relate
to the cost of manufacturing the Contract
Manufactured Factor VIII Inhibitor
Treatments.
-
- 5. Upon reasonable notice and request
from the Acquirer or the New Acquirer to
Respondent, Respondent shall provide: (a)
such assistance and advice as is
reasonably necessary to enable the
Acquirer or the New Acquirer to obtain
all necessary FDA approvals to
manufacture Factor VIII Inhibitor
Treatments for sale in the United States;
(b) such assistance as is reasonably
necessary to enable the Acquirer to
manufacture Factor VIII Inhibitor
Treatments in substantially the same
manner and quality employed or achieved
by Baxter or, if divested to the New
Acquirer, Immuno, prior to the
Acquisition; and (c) consultation with
knowledgeable employees of Baxter and
training at a facility of the Acquirer's
or the New Acquirer's choosing, for a
period of time, not to exceed one (1)
year, sufficient to satisfy the
management of the Acquirer or the New
Acquirer that its personnel are
adequately trained in the manufacture of
Factor VIII Inhibitor Treatments for sale
in the United States. Such assistance
shall include an on-site inspection of
Baxter's facility that is performing the
Contract Manufacturing, upon reasonable
notice and request of the Acquirer or the
New Acquirer. Respondent may require
reimbursement from the Acquirer or the
New Acquirer for all its direct
out-of-pocket expenses incurred in
providing the services required by this
subparagraph II.C.5.
-
- 6. The Divestiture Agreement shall
require the Acquirer or the New Acquirer
to submit to the Commission, with the
divestiture application filed by
Respondent with the Commission requesting
approval of the proposed divestiture, a
certification attesting to the good faith
intention of the Acquirer or the New
Acquirer, including an actual plan by the
Acquirer or the New Acquirer, to obtain
in an expeditious manner all necessary
FDA approvals to manufacture Factor VIII
Inhibitor Treatments for sale in the
United States.
-
- 7. The Divestiture Agreement shall
require the Acquirer or the New Acquirer
to submit to the trustee appointed
pursuant to Paragraph III. of this order,
periodic verified written reports setting
forth in detail the efforts of the
Acquirer or the New Acquirer to sell
Contract Manufactured Factor VIII
Inhibitor Treatments in the United States
and to obtain all FDA approvals necessary
to manufacture its own Factor VIII
Inhibitor Treatments for sale in the
United States. The Divestiture Agreement
shall require the first such report to be
submitted 60 days from the date the
Divestiture Agreement is approved by the
Commission and every 90 days thereafter
until all necessary FDA approvals are
obtained by the Acquirer or the New
Acquirer to manufacture Factor VIII
Inhibitor Treatments for sale in the
United States. The Divestiture Agreement
shall also require the Acquirer or the
New Acquirer to report to the Commission
and the trustee within ten (10) days of
its ceasing the sale of Contract
Manufactured Factor VIII Inhibitor
Treatments in the United States for any
time period exceeding sixty (60) days or
abandoning its efforts to obtain all
necessary FDA approvals to manufacture
its own Factor VIII Inhibitor Treatments
for sale in the United States.
-
- 8. The Divestiture Agreement shall
provide that the Commission may terminate
the Divestiture Agreement if the Acquirer
or the New Acquirer: (a) voluntarily
ceases for sixty (60)
days or more the sale of Contract
Manufactured Factor VIII Inhibitor
Treatments in the United States prior to
obtaining all necessary FDA approvals to
manufacture Factor VIII Inhibitor
Treatments for sale in the United States;
(b) abandons its efforts to obtain all
necessary FDA approvals to manufacture
Factor VIII Inhibitor Treatments for sale
in the United States; or (c) fails to
obtain all necessary FDA approvals of its
own to manufacture Factor VIII Inhibitor
Treatments for sale in the United States
within three (3) years from the date the
Commission approves the Divestiture
Agreement with the Acquirer or the New
Acquirer; provided, however,
that the time period may be extended by
the Commission in twelve (12) month
increments for a period not to exceed an
additional forty-eight (48) months if the
trustee appointed pursuant to Paragraph
III. of this order certifies to the
Commission that the Acquirer or the New
Acquirer made good faith efforts to
obtain all necessary FDA approvals for
manufacturing Factor VIII Inhibitor
Treatments for sale in the United States
and that such FDA approvals appear likely
to be obtained within such extended time
period.
-
- 9. The Divestiture Agreement with an
Acquirer shall provide that if it is
terminated, the Autoplex Assets shall
revert back to the Respondent and either
the Autoplex Assets or the FEIBA Assets
shall be divested by the trustee to a New
Acquirer pursuant to the provisions of
Paragraph IV. of this order.
D. While the obligations imposed by Paragraphs
II., III. or IV. of this order are in effect,
Respondent shall take such actions as are
necessary: (1) to maintain all necessary FDA
approvals to research, develop, manufacture and
sell both of the Factor VIII Inhibitor Treatments
in the United States; (2) to maintain the
viability and marketability of both of the
Divested Inhibitor Assets as well as all tangible
assets, including manufacturing facilities,
needed to Contract Manufacture and sell Factor
VIII Inhibitor Treatments; and (3) to prevent the
destruction, removal, wasting, deterioration or
impairment of any of the Divested Inhibitor
Assets or tangible assets including the
manufacturing facilities needed to Contract
Manufacture and sell both of the Factor VIII
Inhibitor Treatments, except for ordinary wear
and tear.
III.
IT IS FURTHER ORDERED that:
- A. At any time after this order becomes final,
the Commission may appoint a trustee to monitor
whether Baxter and the Acquirer or the New
Acquirer expeditiously perform their respective
responsibilities as required by the Divestiture
Agreement approved by the Commission and this
order. Baxter shall consent to the following
terms and conditions regarding the powers,
duties, authorities, and responsibilities of the
trustee appointed pursuant to this Paragraph:
- 1. The Commission shall select the
trustee, subject to the consent of
Baxter, which consent shall not be
unreasonably withheld. If Baxter 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 Baxter of the identity of
any proposed trustee, Baxter shall be
deemed to have consented to the selection
of the proposed trustee.
- 2. The trustee shall have the power and
authority to monitor Respondent's
compliance with the terms of Paragraph
II. of this order and with the
Divestiture Agreement with the Acquirer
or the New Acquirer.
- 3. Within ten (10) days after appointment
of the trustee, Baxter shall execute a
trust agreement that, subject to the
prior approval of the Commission, confers
on the trustee all the rights and powers
necessary to permit the trustee to
monitor Respondent's compliance with the
terms of Paragraph II. of this order and
monitor the efforts of the Acquirer or
New Acquirer to obtain all necessary FDA
approvals to manufacture and sell Factor
VIII Inhibitor Treatments.
- 4. The trustee shall serve until such
time as the Acquirer or the New Acquirer
has received all necessary FDA approvals
to research, develop, manufacture and
sell Factor VIII Inhibitor Treatments in
the United States.
- 5. The trustee shall have full and
complete access to the personnel, books,
records, facilities and technical
information relating to the research,
development, manufacture or sale of
Baxter's Factor VIII Inhibitor
Treatments, or to any other relevant
information, as the trustee may
reasonably request, including, but not
limited to, all documents and records
kept in the normal course of business
that relate to the cost of manufacturing
Factor VIII Inhibitor Treatments.
Respondent shall cooperate with any
reasonable request of the trustee.
Respondent shall take no action to
interfere with or impede the trustee's
ability to monitor Respondent's
compliance with Paragraph II. of this
order and the Divestiture Agreement with
the Acquirer or the New Acquirer.
- 6. The trustee shall serve, without bond
or other security, at the cost and
expense of Baxter, on such reasonable and
customary terms and conditions as the
Commission may set. The trustee shall
have authority to employ, at the cost and
expense of Baxter, such consultants,
accountants, attorneys and other
representatives and assistants as are
reasonably necessary to carry out the
trustee's duties and responsibilities.
The trustee shall account for all
expenses incurred. The Commission shall
approve the account of the trustee,
including fees for his or her services.
- 7. Respondent shall indemnify the trustee
and hold the trustee harmless against any
losses, claims, damages, liabilities or
expenses arising out of, or in connection
with, the performance of the 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
the misfeasance, gross negligence,
willful or wanton acts, or bad faith by
the trustee.
- 8. If the trustee ceases to act or fails
to act diligently, a substitute trustee
shall be appointed in the same manner as
provided in subparagraph III.A.1. of this
order.
- 9. The Commission may on its own
initiative or at the request of the
trustee issue such additional orders or
directions as may be necessary or
appropriate to assure compliance with the
requirements of Paragraph II. of this
order and the Divestiture Agreement with
the Acquirer or the New Acquirer.
- 10. The trustee shall evaluate reports
submitted to it by the Acquirer or the
New Acquirer with respect to the efforts
of the Acquirer or the New Acquirer to
obtain all necessary FDA approvals to
manufacture Factor VIII Inhibitor
Treatments for sale in the United States
and shall report in writing to the
Commission every sixty (60) days
concerning compliance by the Respondent
and the Acquirer or the New Acquirer,
with the provisions of Paragraph II. of
this order and the efforts of the
Acquirer or the New Acquirer to obtain
all necessary FDA approvals to
manufacture Factor VIII Inhibitor
Treatments for sale in the United States.
B. If the Commission terminates the Divestiture
Agreement pursuant to subparagraph II.C.8. of this
order, the Commission may direct the trustee to seek
a New Acquirer, as provided for in Paragraph IV. of
this order and the Divested Inhibitor Assets shall
revert back to the Respondent.
IV.
IT IS FURTHER ORDERED that:
- A. If Baxter fails to comply with the terms of
Paragraph II. of this order and to divest
absolutely and in good faith the Autoplex Assets
within four (4) months from the date Respondent
signed the Agreement Containing Consent Order, or
if the Commission terminates the Divestiture
Agreement pursuant to subparagraph II.C.8. of
this order, then any executed Divestiture
Agreement with the Acquirer shall be terminated
and the Commission may appoint a trustee to: (a)
divest either the Autoplex Assets or the FEIBA
Assets; (b) effect all arrangements, including,
but not limited to, the licensing of any Baxter
patents and know-how not related solely to the
research, development, manufacture or sale of
Factor VIII Inhibitor Treatments, necessary to
enable the New Acquirer to manufacture and sell a
Factor VIII Inhibitor Treatment using the
Divested Inhibitor Assets; and (c) enter into a
Divestiture Agreement with a New Acquirer that
satisfies the requirements of Paragraph II.C. of
this order. In the event that the New Acquirer
does not choose to acquire all of the physical
assets included in the Divested Inhibitor Assets
because the New Acquirer does not need such
physical assets in order to engage in the
manufacture and sale of Factor VIII Inhibitor
Treatments, Respondent shall not be required to
divest such assets. The purpose of the
divestiture is to ensure the continued
competition between Autoplex and FEIBA, in the
same manner in which these products would compete
absent the Acquisition, and to remedy the
lessening of competition resulting from the
proposed Acquisition as alleged in the
Commission's complaint. Neither the decision of
the Commission to appoint the trustee nor the
decision of the Commission not to appoint the
trustee to divest either the Autoplex or the
FEIBA Assets under this Paragraph shall preclude
the Commission or the Attorney General from
seeking civil penalties or any other relief
available to it, including a court-appointed
trustee, pursuant to § 5(l) of the
Federal Trade Commission Act, or any other
statute enforced by the Commission, for any
failure by the respondent to comply with this
order.
-
- B. If a trustee is appointed under Paragraph
IV.A. of this order to divest either the Autoplex
Assets or the FEIBA Assets to a New Acquirer and
to enter into a Divestiture Agreement with the
New Acquirer, Respondent shall consent to the
following terms and conditions regarding the
trustee's powers, duties, authorities, and
responsibilities:
-
- 1. The Commission shall select the
trustee, subject to the consent of
Baxter, which consent shall not be
unreasonably withheld. If Baxter 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 Baxter of the identity of
any proposed trustee, Baxter shall be
deemed to have consented to the selection
of the proposed trustee. This trustee may
be the same trustee as appointed pursuant
to Paragraph III. of this order.
-
- 2. Subject to the prior approval of the
Commission, the trustee shall have the
exclusive power and authority to divest
either the Autoplex Assets or the FEIBA
Assets to a New Acquirer and to enter
into a Divestiture Agreement with the New
Acquirer pursuant to the terms of
Paragraph II.C. of this order, which
Divestiture Agreement shall be subject to
the prior approval of the Commission.
-
- 3. Within ten (10) days after appointment
of the trustee, Baxter shall execute a
(or amend the existing) trust agreement
that, subject to the prior approval of
the Commission and, in the case of a
court-appointed trustee, of the court,
transfers to the trustee all rights and
powers necessary to permit the trustee to
effect the divestiture required by
Paragraph IV.A. of this order.
-
- 4. The trustee shall have twelve (12)
months from the date the Commission
approves the trust agreement described in
subparagraph IV.B.3. of this order to
divest either the Autoplex Assets or the
FEIBA Assets and to enter into a
Divestiture Agreement with the New
Acquirer that satisfies the requirements
of Paragraph II.C. of this order. If,
however, at the end of the twelve (12)
month period, the trustee has submitted a
plan of divestiture or believes that
divestiture can be achieved within a
reasonable time, the twelve (12) month
period may be extended by the Commission,
or in the case of a court-appointed
trustee, by the court; provided, however,
the Commission may extend the twelve (12)
month period only two (2) times.
-
- 5. The trustee shall have full and
complete access to the personnel, books,
records, data, facilities and technical
information related to the manufacture,
distribution, or sale of Factor VIII
Inhibitor Treatments or to any other
relevant information, as the trustee may
request. Respondent shall develop such
financial or other information as such
trustee may request and shall cooperate
with the trustee. Respondent shall take
no action to interfere with or impede the
trustee's accomplishment of his or her
responsibilities.
-
- 6. The trustee shall use reasonable
efforts to negotiate the most favorable
price and terms available in each
contract that is submitted to the
Commission, subject to Respondent's
absolute and unconditional obligation to
divest at no minimum price and the
trustee's obligation to expeditiously
accomplish the remedial purpose of the
order; to assure that Baxter effects all
arrangements necessary to enable the New
Acquirer to produce a Factor VIII
Inhibitor Treatment using the Divested
Inhibitor Assets; to assure that Baxter
enters into a Divestiture Agreement with
the New Acquirer to acquire the Divested
Inhibitor Assets that complies with the
provisions of Paragraph II.C. of this
order; and to assure that Baxter complies
with the remaining provisions of
Paragraph II.D. of this order. The
divestiture shall be made to and the
Divestiture Agreement shall be made with
the New Acquirer in the manner set forth
in Paragraph II.C. of this order;
provided, however, if the trustee
receives bona fide offers from more than
one acquiring entity, and if the
Commission determines to approve more
than one such acquiring entity, the
trustee shall divest to the acquiring
entity selected by Respondent from among
those approved by the Commission.
-
- 7. The trustee shall serve, without bond
or other security, at the cost and
expense of Respondent, on such reasonable
and customary terms and conditions as the
Commission or a court may set. The
trustee shall have the authority to
employ, at the cost and expense of
Respondent, such consultants,
accountants, attorneys, investment
bankers, business brokers, appraisers,
and other representatives and assistants
as are necessary to carry out the
trustee's duties and responsibilities.
The trustee shall account for all monies
derived from the divestiture and all
expenses incurred. After approval by the
Commission and, in the case of a
court-appointed trustee, by the court, of
the account of the trustee, including
fees for his or her services, all
remaining monies shall be paid at the
direction of the Respondent and the
trustee's power shall be terminated. The
trustee's compensation shall be based at
least in significant part on a commission
arrangement contingent on the trustee's
locating a New Acquirer and assuring
compliance with this order.
-
- 8. Respondent shall indemnify the trustee
and hold the trustee harmless against any
losses, claims, damages, liabilities, or
expenses arising out of, or in connection
with, the performance of the 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
the misfeasance, gross negligence,
willful or wanton acts, or bad faith by
the trustee.
-
- 9. If the trustee ceases to act or fails
to act diligently, a substitute trustee
shall be appointed in the same manner as
provided in Paragraph IV.B. of this
order.
-
- 10. The Commission or, in the case of a
court-appointed trustee, the court, may
on its own initiative or at the request
of the trustee issue such additional
orders or directions as may be necessary
or appropriate to comply with the terms
of this order.
-
- 11. The trustee shall have no obligation
or authority to operate or maintain the
Divested Inhibitor Assets.
-
- 12. The trustee shall report in writing
to Respondent and the Commission every
sixty (60) days concerning his or her
efforts to divest either the Autoplex
Assets or the FEIBA Assets as required by
this order.
V.
IT IS FURTHER ORDERED that:
- A. Within four (4) months of the date Baxter
signed the Agreement Containing Consent Order in
this matter, Baxter shall grant a non-exclusive,
royalty-free license, in perpetuity, and in good
faith, of the Immuno Fibrin Sealant Assets, and
shall execute an agreement that includes the
provisions required by Paragraph V.C. of this
order.
-
- B. The Immuno Fibrin Sealant Assets shall be
licensed only to a Fibrin Sealant Licensee that
receives the prior approval of the Commission and
only in a manner that receives the prior approval
of the Commission. The purpose of the licensing
of the Immuno Fibrin Sealant Assets is to ensure
the continued research and development
competition between Immuno's Fibrin Sealant and
Baxter's Fibrin Sealant, to ensure the use of the
Immuno Fibrin Sealant Assets for the research,
development, manufacture and sale of a Fibrin
Sealant approved by the FDA for sale in the
United States, and to remedy the lessening of
competition resulting from the Acquisition as
alleged in the Commission's complaint.
-
- C. Respondent's agreement with the Fibrin Sealant
Licensee (hereinafter "License
Agreement") shall not include any provision
restricting the Fibrin Sealant Licensee's ability
to sublicense the product. The License Agreement
shall include the following and Baxter shall
commit to satisfy the following:
-
- 1. Baxter shall grant to the Fibrin
Sealant Licensee the right of reference
to the data contained in Immuno's PLA No.
87-0509 for the Immuno Fibrin Sealant
Assets on file with the FDA. Baxter shall
make all necessary filings with the FDA
authorizing the FDA to refer to Immuno's
PLA No. 87-0509 for the data in support
of the Fibrin Sealant Licensee's PLA for
a Fibrin Sealant, including any
supplemental PLAs or related PLAs.
Provided, however, that the right of
reference granted in this subparagraph
does not constitute a general release of
the data in Immuno's PLA No. 87-0509,
including any supplemental PLAs or
related PLAs, except as it may appear in
labeling.
-
- 2. Once all necessary FDA approvals are
obtained by Baxter (or Immuno prior to
the Acquisition) to manufacture and sell
Immuno's Fibrin Sealant in the United
States, Baxter shall Contract Manufacture
and deliver to the Fibrin Sealant
Licensee in a timely manner and under
reasonable terms and conditions, a supply
of Immuno's Fibrin Sealant specified in
the License Agreement, at Baxter's Cost
for a period not to exceed three (3)
years from the date the License Agreement
is approved, or four (4) months after the
date the Fibrin Sealant Licensee obtains
all necessary FDA approvals to
manufacture Fibrin Sealant for sale in
the United States, whichever is earlier; provided,
however, that the time period
may be extended by the Commission in
twelve (12) month increments for a period
not to exceed and additional forty-eight
(48) months if the trustee appointed
pursuant to Paragraph VI. of this order
submits to the Commission the
certification provided for in
subparagraph V.C.8. of this order.
-
- 3. Baxter shall make representations and
warranties to the Fibrin Sealant Licensee
that the Fibrin Sealant that is Contract
Manufactured by Baxter for the Fibrin
Sealant Licensee meets the FDA approved
specifications therefor and is not
adulterated or misbranded within the
meaning of the Food, Drug and Cosmetic
Act, 21 U.S.C. § 321, et seq.
Baxter shall agree to indemnify, defend
and hold the Fibrin Sealant Licensee
harmless from any and all suits, claims,
actions, demands, liabilities, expenses
or losses alleged to result from the
failure of the Fibrin Sealant Contract
Manufactured by Baxter pursuant to
subparagraph V.C.2. of this order to meet
FDA specifications. This obligation shall
be contingent upon the Fibrin Sealant
Licensee giving Baxter prompt, adequate
notice of such claim, cooperating fully
in the defense of such claim, and
permitting Baxter to assume the sole
control of all phases of the defense
and/or settlement of such claim,
including the selection of counsel. This
obligation shall not require Baxter to be
liable for any negligent act or omission
of the Fibrin Sealant Licensee or for any
representations and warranties, express
or implied, made by the Fibrin Sealant
Licensee that exceed the representations
and warranties made by Baxter to the
Fibrin Sealant Licensee.
-
- 4. During the term of Contract
Manufacturing, upon reasonable request by
the Fibrin Sealant Licensee or the
trustee appointed pursuant to Paragraph
VI. of this order, Baxter shall make
available to the trustee, or its agents
or representatives, all records kept in
the normal course of business that relate
to the cost of manufacturing the Contract
Manufactured Fibrin Sealant.
-
- 5. Upon reasonable notice and request
from the Fibrin Sealant Licensee to
Respondent, Respondent shall provide: (a)
such assistance and advice as is
reasonably necessary to enable the Fibrin
Sealant Licensee to obtain all necessary
FDA approvals to manufacture Fibrin
Sealant for sale in the United States;
(b) such assistance as is reasonably
necessary to enable the Fibrin Sealant
Licensee to manufacture Fibrin Sealant in
substantially the same manner and quality
employed or achieved by Baxter once it
begins manufacturing the Immuno Fibrin
Sealant; and (c) consultation with
knowledgeable employees of Baxter and
training at a either Immuno's or the
Fibrin Sealant Licensee's facility,
whichever the Fibrin Sealant Licensee
chooses, for a period of time, not to
exceed one (1) year, sufficient to
satisfy the Fibrin Sealant Licensee's
management that its personnel are
adequately trained in the manufacture of
Fibrin Sealant for sale in the United
States. Such assistance shall include an
on-site inspection of Baxter's facility
that is performing the Contract
Manufacturing, upon reasonable notice and
request of the Fibrin Sealant Licensee.
Respondent may require reimbursement from
the Fibrin Sealant Licensee for all its
direct out-of-pocket expenses incurred in
providing the services required by this
subparagraph V.C.5.
-
- 6. The License Agreement shall require
the Fibrin Sealant Licensee to submit to
the Commission, with the divestiture
application filed by Respondent with the
Commission requesting approval of the
proposed license, a certification
attesting to the good faith intention of
the Fibrin Sealant Licensee, and
including an actual plan by the Fibrin
Sealant Licensee, to obtain in an
expeditious manner all necessary FDA
approvals to manufacture Fibrin Sealant
for sale in the United States.
-
- 7. The License Agreement shall require
the Fibrin Sealant Licensee to submit to
the trustee appointed pursuant to
Paragraph VI. of this order, periodic
verified written reports setting forth in
detail the efforts of the Fibrin Sealant
Licensee to sell Contract Manufactured
Fibrin Sealant in the United States and
to obtain all FDA approvals necessary to
manufacture its own Fibrin Sealant for
sale in the United States. The License
Agreement shall require the first such
report to be submitted 60 days from the
date the Commission approves the License
Agreement and every 90 days thereafter
until all necessary FDA approvals are
obtained by the Fibrin Sealant Licensee
to manufacture Fibrin Sealant for sale in
the United States. The License Agreement
shall also require the Fibrin Sealant
Licensee to report to the Commission and
the trustee within ten (10) days of its
ceasing the sale of any Contract
Manufactured Fibrin Sealant in the United
States for any time period exceeding
sixty (60) days or abandoning its efforts
to obtain all necessary FDA approvals to
manufacture its own Fibrin Sealant for
sale in the United States.
-
- 8. The License Agreement shall provide
that the Commission may terminate the
License Agreement if the Fibrin Sealant
Licensee: (a) voluntarily ceases for
sixty (60) days or more the sale
of Contract Manufactured Fibrin Sealant
in the United States prior to obtaining
all necessary FDA approvals to
manufacture Fibrin Sealant for sale in
the United States; (b) abandons its
efforts to obtain all necessary FDA
approvals to manufacture Fibrin Sealant
for sale in the United States; or (c)
fails to obtain all necessary FDA
approvals of its own to manufacture
Fibrin Sealant for sale in the United
States within three (3) years from the
date the Commission approves the License
Agreement with the Fibrin Sealant
Licensee; provided, however,
that the time period may be extended by
the Commission in twelve (12) month
increments for a period not to exceed an
additional forty-eight (48) months if the
trustee appointed pursuant to Paragraph
VI. of this order certifies to the
Commission that the Fibrin Sealant
Licensee made good faith efforts to
obtain all necessary FDA approvals for
manufacturing Fibrin Sealant for sale in
the United States and that such FDA
approvals appear likely to be obtained
within such extended time period. The
License Agreement shall provide that if
all necessary FDA approvals to
manufacture Fibrin Sealant for sale in
the United States are not obtained within
the time frames specified by this
subparagraph V.C.8., the Commission may
terminate the License Agreement.
-
- 9. The License Agreement with a Fibrin
Sealant Licensee shall provide that if it
is terminated, the License Agreement
shall be terminated and the trustee shall
grant a new non-exclusive, royalty-free
license to a new Fibrin Sealant Licensee
pursuant to the provisions of Paragraph
VII. of this order.
- D. While the obligations imposed by Paragraphs
V., VI. or VII. of this order are in effect,
Respondent shall take such actions as are
necessary: (1) to maintain and obtain all
necessary FDA approvals to research, develop,
manufacture and sell Immuno's Fibrin Sealant in
the United States; (2) to maintain the viability
and marketability of the Immuno Fibrin Sealant
Assets as well as all tangible assets, including
manufacturing facilities, needed to Contract
Manufacture and sell Immuno's Fibrin Sealant; and
(3) to prevent the destruction, removal, wasting,
deterioration or impairment of any of the Immuno
Fibrin Sealant Assets or tangible assets,
including manufacturing facilities, needed to
Contract Manufacture and sell Immuno's Fibrin
Sealant, except for ordinary wear and tear.
VI.
IT IS FURTHER ORDERED that:
- A. At any time after this order becomes final,
the Commission may appoint a trustee to monitor
whether Baxter and the Fibrin Sealant Licensee
expeditiously perform their respective
responsibilities as required by the License
Agreement approved by the Commission and this
order. Baxter shall consent to the following
terms and conditions regarding the powers,
duties, authorities, and responsibilities of the
trustee appointed pursuant to this Paragraph:
-
- 1. The Commission shall select the
trustee, subject to the consent of
Baxter, which consent shall not be
unreasonably withheld. If Baxter 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 Baxter of the identity of
any proposed trustee, Baxter shall be
deemed to have consented to the selection
of the proposed trustee. This trustee may
be the same trustee appointed pursuant to
Paragraphs III. or IV. of this order.
-
- 2. The trustee shall have the power and
authority to monitor Respondent's
compliance with the terms of Paragraph V.
of this order and with the License
Agreement with the Fibrin Sealant
Licensee.
-
- 3. Within ten (10) days after appointment
of the trustee, Baxter shall execute a
trust agreement that, subject to the
prior approval of the Commission, confers
on the trustee all the rights and powers
necessary to permit the trustee to
monitor Respondent's compliance with the
terms of Paragraph V. of this order and
monitor the efforts of the Fibrin Sealant
Licensee to obtain all necessary FDA
approvals to manufacture and sell Fibrin
Sealant.
-
- 4. The trustee shall serve until such
time as the Fibrin Sealant Licensee has
received all necessary FDA approvals to
research, develop, manufacture and sell
Fibrin Sealant in the United States.
-
- 5. The trustee shall have full and
complete access to the personnel, books,
records, facilities and technical
information relating to the research,
development, manufacture or sale of
Immuno's Fibrin Sealant, or to any other
relevant information, as the trustee may
reasonably request, including, but not
limited to, all documents and records
kept in the normal course of business
that relate to the cost of manufacturing
Fibrin Sealant. Respondent shall
cooperate with any reasonable request of
the trustee. Respondent shall take no
action to interfere with or impede the
trustee's ability to monitor Respondent's
compliance with Paragraph V. of this
order and the License Agreement with the
Fibrin Sealant Licensee.
-
- 6. The trustee shall serve, without bond
or other security, at the cost and
expense of Baxter, on such reasonable and
customary terms and conditions as the
Commission may set. The trustee shall
have authority to employ, at the cost and
expense of Baxter, such consultants,
accountants, attorneys and other
representatives and assistants as are
reasonably necessary to carry out the
trustee's duties and responsibilities.
The trustee shall account for all
expenses incurred. The Commission shall
approve the account of the trustee,
including fees for his or her services.
-
- 7. Respondent shall indemnify the trustee
and hold the trustee harmless against any
losses, claims, damages, liabilities or
expenses arising out of, or in connection
with, the performance of the 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
the misfeasance, gross negligence,
willful or wanton acts, or bad faith by
the trustee.
-
- 8. If the trustee ceases to act or fails
to act diligently, a substitute trustee
shall be appointed in the same manner as
provided in subparagraph VI.A.1. of this
order.
-
- 9. The Commission may on its own
initiative or at the request of the
trustee issue such additional orders or
directions as may be necessary or
appropriate to assure compliance with the
requirements of Paragraph V. of this
order and the License Agreement with the
Fibrin Sealant Licensee.
-
- 10. The trustee shall evaluate reports
submitted to it by the Fibrin Sealant
Licensee with respect to the efforts of
the Fibrin Sealant Licensee to obtain all
necessary FDA approvals to manufacture
Fibrin Sealant for sale in the United
States and shall report in writing to the
Commission every sixty (60) days
concerning compliance by the Respondent
and the Fibrin Sealant Licensee with the
provisions of Paragraph V. of this order
and the efforts of the Fibrin Sealant
Licensee to obtain all necessary FDA
approvals to manufacture Fibrin Sealant
for sale in the United States.
B. If the Commission terminates the
Divestiture Agreement pursuant to subparagraph
V.C.8. of this order, the Immuno Fibrin Sealant
Assets shall revert back to the Respondent and
the Commission may direct the trustee to seek a
new Fibrin Sealant Licensee, as provided for in
Paragraph VII. of this order.
VII.
IT IS FURTHER ORDERED that:
- A. If Baxter fails to comply with the terms of
Paragraph V. of this order and enter into a
License Agreement with a Fibrin Sealant Licensee
within four (4) months from the date Respondent
signed the Agreement Containing Consent Order,
the Commission may appoint a trustee to: (a)
grant a non-exclusive, royalty-free license, in
perpetuity, and in good faith, of the Immuno
Fibrin Sealant Assets to a Fibrin Sealant
Licensee; and (b) enter into a License Agreement
with a Fibrin Sealant Licensee that satisfies the
requirements of Paragraph V.C. of this order. The
purpose of the licensing of the Immuno Fibrin
Sealant Assets is to ensure the continued
research and development competition between
Immuno's Fibrin Sealant and Baxter's Fibrin
Sealant, to ensure the use of the Immuno Fibrin
Sealant Assets for the research, development,
manufacture and sale of Fibrin Sealant approved
by the FDA for sale in the United States, and to
remedy the lessening of competition resulting
from the Acquisition as alleged in the
Commission's complaint. Neither the decision of
the Commission to appoint the trustee nor the
decision of the Commission not to appoint the
trustee to license the Immuno Fibrin Sealant
Assets under this Paragraph shall preclude the
Commission or the Attorney General from seeking
civil penalties or any other relief available to
it, including a court-appointed trustee, pursuant
to § 5(l) of the Federal Trade
Commission Act, or any other statute enforced by
the Commission, for any failure by the respondent
to comply with this order.
- B. If a trustee is appointed under Paragraph
VII.A. of this order to license the Immuno Fibrin
Sealant Assets and enter into a License Agreement
with a Fibrin Sealant Licensee, Baxter shall
consent to the following terms and conditions
regarding the trustee's powers, duties,
authorities, and responsibilities:
-
- 1. The Commission shall select the
trustee, subject to the consent of
Baxter, which consent shall not be
unreasonably withheld. If Baxter 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 Baxter of the identity of
any proposed trustee, Baxter shall be
deemed to have consented to the selection
of the proposed trustee. This trustee may
be the same trustee as appointed pursuant
to Paragraphs III., IV. or VI. of this
order.
-
- 2. Subject to the prior approval of the
Commission, the trustee shall have the
exclusive power and authority to grant a
non-exclusive, royalty-free license of
the Immuno Fibrin Sealant Assets to a
Fibrin Sealant Licensee and to enter into
a License Agreement with a Fibrin Sealant
Licensee pursuant to the terms of
Paragraph V.C. of this order, which
License Agreement shall be subject to the
prior approval of the Commission.
-
- 3. Within ten (10) days after appointment
of the trustee, Baxter shall execute a
(or amend the existing) trust agreement
that, subject to the prior approval of
the Commission and, in the case of a
court-appointed trustee, of the court,
transfers to the trustee all rights and
powers necessary to permit the trustee to
effect the non-exclusive, royalty-free
license required by this order.
-
- 4. The trustee shall have twelve (12)
months from the date the Commission
approves the trust agreement described in
subparagraph VII.B.3. of this order to
license the Immuno Fibrin Sealant Assets
and enter into a License Agreement with a
Fibrin Sealant Licensee that satisfies
the requirements of Paragraph V.C. of
this order. If, however, at the end of
the twelve (12) month period, the trustee
has submitted a plan of licensing or
believes that licensing can be achieved
within a reasonable time, the twelve (12)
month period may be extended by the
Commission or, in the case of a
court-appointed trustee, by the court;
provided, however, the Commission may
extend the twelve (12) month period only
two (2) times.
-
- 5. The trustee shall have full and
complete access to the personnel, books,
records, data, facilities, and technical
information related to the Immuno Fibrin
Sealant Assets, or to any other relevant
information, as the trustee may
reasonably request. Respondent shall
develop such financial or other
information as such trustee may request
and shall cooperate with the trustee.
Respondent shall take no action to
interfere with or impede the trustee's
ability to accomplish the licensing of
the Immuno Fibrin Sealant Assets required
by this order. Any delays in licensing
the Immuno Fibrin Sealant Assets required
by this order caused by Respondent shall
extend the time under subparagraph
VII.B.4. of the order for accomplishing
the licensing of the Immuno Fibrin
Sealant Assets required by this order in
an amount equal to the delay, as
determined by the Commission or, for the
court-appointed trustee, by the court.
-
- 6. The trustee shall use reasonable
efforts to negotiate the most favorable
price and terms available in each
contract that is submitted to the
Commission, subject to Respondent's
absolute and unconditional obligation to
grant a license of the Immuno Fibrin
Sealant Assets as required by this order
at no minimum price and the trustee's
obligation to expeditiously accomplish
the remedial purpose of the order; to
assure that Baxter enters into a License
Agreement with a Fibrin Sealant Licensee
to acquire the Immuno Fibrin Sealant
Assets that complies with the provisions
of Paragraph V.C. of this order; and to
assure that Baxter complies with the
remaining provisions of Paragraph V.D. of
this order. The license shall be made to
Fibrin Sealant Licensee in a manner set
forth by this order; provided, however,
if the trustee receives bona fide offers
from more than one acquiring entity, and
if the Commission determines to approve
more than one such acquiring entity, the
trustee shall grant a non-exclusive,
royalty-free license to the acquiring
entity selected by Respondent from among
those approved by the Commission.
-
- 7. The trustee shall serve, without bond
or other security, at the cost and
expense of Baxter, on such reasonable and
customary terms and conditions as the
Commission or a court may set. The
trustee shall have the authority to
employ, at the cost and expense of
Baxter, such consultants, accountants,
attorneys, investment bankers, business
brokers, appraisers and other
representatives and assistants as are
necessary to carry out the trustee's
duties and responsibilities. The trustee
shall account for all monies derived from
the licensing and all expenses incurred.
After approval by the Commission and, in
the case of a court-appointed trustee, by
the court, of the account of the trustee,
including fees for his or her services,
all remaining monies shall be paid at the
direction of Baxter and the trustee's
power shall be terminated. The trustee's
compensation shall be based at least in
significant part on a commission
arrangement contingent on the trustee's
ability to grant a non-exclusive,
royalty-free license of the Immuno Fibrin
Sealant Assets.
-
- 8. Respondent shall indemnify the trustee
and hold the trustee harmless against any
losses, claims, damages, liabilities, or
expenses arising out of, or in connection
with, the performance of the 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
the misfeasance, gross negligence,
willful or wanton acts, or bad faith by
the trustee.
-
- 9. If the trustee ceases to act or fails
to act diligently, a substitute trustee
shall be appointed in the same manner as
provided in Paragraph VII.B. of this
order.
-
- 10. The Commission or, in the case of a
court-appointed trustee, the court, may
on its own initiative or at the request
of the trustee issue such additional
orders or directions as may be necessary
or appropriate to comply with the terms
of this order.
-
- 11. The trustee shall have no obligation
or authority to operate or maintain the
Immuno Fibrin Sealant Assets.
-
- 12. The trustee shall report in writing
to Baxter and to the Commission every
sixty (60) days concerning the trustee's
efforts to grant a non-exclusive,
royalty-free license of the Immuno Fibrin
Sealant Assets as required by this order.
VIII.
IT IS FURTHER ORDERED that Respondent
shall comply with all terms of the Interim Agreement,
attached to this order and made a part hereof as Appendix
I.
IX.
IT IS FURTHER ORDERED that:
- A. Within sixty (60) days after the date this
order becomes final and every ninety (90) days
thereafter until Baxter has fully complied with
the provisions of Paragraphs II., IV., V. and
VII. of this order, Baxter 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 these Paragraphs of this order. Baxter shall
include in its compliance reports, among other
things that are required from time to time, a
full description of the efforts being made to
comply with these Paragraphs of this order,
including a description of all substantive
contacts or negotiations for accomplishing the
divestiture, entering into the Divestiture
Agreement and entering into a license Agreement,
required by this order, including the identity of
all parties contacted. Baxter shall include in
its compliance reports copies of all written
communications to and from such parties, all
internal memoranda, and all reports and
recommendations concerning the Divestiture
Agreement required by Paragraph II. and the
License Agreement required by Paragraph V. of
this order.
-
- B. One (1) year from the date this order becomes
final and annually until Respondent has complied
with all terms of this order or until the
Acquirer or New Acquirer has obtained all
necessary FDA approvals to manufacture Factor
VIII Inhibitor Treatments for sale in the United
States and the Fibrin Sealant Licensee has
obtained all necessary FDA approvals to
manufacture Fibrin Sealant for sale in the United
States, whichever is later, and at such other
times as the Commission may require, Respondent
shall file a verified written report with the
Commission setting forth in detail the manner and
form in which it has complied and is complying
with this order.
X.
IT IS FURTHER ORDERED that, for the
purpose of determining or securing compliance with this
order, and subject to any legally recognized privilege,
upon written request and on reasonable notice to
Respondent, Respondent shall permit any duly authorized
representatives of the Commission:
- A. Access, during office hours and in the
presence of counsel, 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 (5) days' notice to Respondent, and
without restraint or interference from
Respondent, to interview officers or employees of
Respondent, who may have counsel present,
regarding such matters.
XI.
IT IS FURTHER ORDERED that Respondent
shall notify the Commission at least thirty (30) days
prior to any change in Respondent such as dissolution,
assignment or sale resulting in the emergence of a
successor, the creation or dissolution of subsidiaries or
any other change that may affect compliance obligations
arising out of the order.
Signed this ____ day of _________, 1996
APPENDIX I
UNITED STATES OF
AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
BAXTER INTERNATIONAL INC.,
a corporation.
File No. 971-0002
INTERIM AGREEMENT
This Interim Agreement is by and between Baxter
International Inc. ("Baxter"), a corporation
organized and existing under the laws of the State of
Delaware, and the Federal Trade Commission (the
"Commission"), an independent agency of the
United States Government, established under the Federal
Trade Commission Act of 1914, 15 U.S.C. § 41, et
seq.
PREMISES
WHEREAS, Baxter has proposed to
acquire the majority of the outstanding voting common
stock of Immuno International AG; and
WHEREAS, the Commission is now
investigating the proposed Acquisition to determine if it
would violate any of the statutes the Commission
enforces; and
WHEREAS, if the Commission accepts
the Agreement Containing Consent Order ("Consent
Agreement"), the Commission will place it on the
public record for a period of at least sixty (60) days
and subsequently may either withdraw such acceptance or
issue and serve its Complaint and decision in disposition
of the proceeding pursuant to the provisions of Section
2.34 of the Commission's Rules; and
WHEREAS, the Commission is concerned
that if an understanding is not reached preserving
competition during the period prior to the final issuance
of the Consent Agreement by the Commission (after the
60-day public notice period), there may be interim
competitive harm and divestiture or other relief
resulting from a proceeding challenging the legality of
the proposed Acquisition might not be possible, or might
be less than an effective remedy; and
WHEREAS, Baxter entering into this
Interim Agreement shall in no way be construed as an
admission by Baxter that the proposed Acquisition
constitutes a violation of any statute; and
WHEREAS, Baxter understands that no
act or transaction contemplated by this Interim Agreement
shall be deemed immune or exempt from the provisions of
the antitrust laws or the Federal Trade Commission Act by
reason of anything contained in this Interim Agreement.
NOW, THEREFORE, Baxter agrees, upon
the understanding that the Commission has not yet
determined whether the proposed Acquisition will be
challenged, and in consideration of the Commission's
agreement that, at the time it accepts the Consent
Agreement for public comment, it will grant early
termination of the Hart-Scott-Rodino waiting period, as
follows:
- That it will execute and be bound by the terms of
the Order contained in the Consent Agreement, as
if it were final, from the date Baxter signs the
Consent Agreement.
-
- That it will take such actions as are necessary:
(1) to maintain all necessary FDA approvals to
research, develop, manufacture and sell both of
the Factor VIII Inhibitor Treatments in the
United States; (2) to maintain the viability and
marketability of both of the Divested Inhibitor
Assets as well as all tangible assets, including
manufacturing facilities, needed to Contract
Manufacture and sell Factor VIII Inhibitor
Treatments; and (3) to prevent the destruction,
removal, wasting, deterioration or impairment of
any of the Divested Inhibitor Assets or tangible
assets including manufacturing facilities needed
to Contract Manufacture and sell both of the
Factor VIII Inhibitor Treatments, except for
ordinary wear and tear.
-
- That it will take such actions as are necessary:
(1) to maintain and obtain all necessary FDA
approvals to research, develop manufacture and
sell Immuno's Fibrin Sealant in the United
States; (2) to maintain the viability and
marketability of the Immuno Fibrin Sealant Assets
as well as all tangible assets, including
manufacturing facilities, needed to Contract
Manufacture and sell Immuno's Fibrin Sealant; and
(3) to prevent the destruction, removal, wasting,
deterioration or impairment of any of the Immuno
Fibrin Sealant Assets or tangible assets,
including manufacturing facilities, needed to
Contract Manufacture and sell Immuno's Fibrin
Sealant, except for ordinary wear and tear.
-
- Baxter agrees that, from the date Baxter signs
the Consent Agreement until the first of the
dates listed in subparagraphs 4.a. and 4.b., it
will comply with the provisions of this Interim
Agreement:
-
- ten (10) business days after the
Commission withdraws its acceptance of
the Consent Agreement pursuant to the
provisions of Section 2.34 of the
Commission's Rules; or
-
- the date the Commission finally issues
its Complaint and its Decision and Order.
- Baxter waives all rights to contest the
validity of this Interim Agreement.
For the purpose of determining or securing compliance
with this Interim Agreement, subject to any legally
recognized privilege, and upon written request, and on
reasonable notice, to Baxter made to its principal
office, Baxter shall permit any duly authorized
representative or representatives of the Commission:
access, during the office hours of Baxter and in the
presence of counsel, to inspect and copy all books,
ledgers, accounts, correspondence, memoranda, and other
records and documents in the possession or under the
control of Baxter relating to compliance with this
Interim Agreement; and upon five (5) days' notice to
Baxter and without restraint or interference from it, to
interview officers, directors, or employees of Baxter,
who may have counsel present, regarding any such matters.
This Interim Agreement shall not be binding until
accepted by the Commission.
Dated:
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
Docket No.
BAXTER INTERNATIONAL INC.,
a corporation.
COMPLAINT
The Federal Trade Commission ("Commission"),
having reason to believe that Respondent, Baxter
International Inc. ("Baxter"), a corporation
subject to the jurisdiction of the Commission, has agreed
to acquire the majority of the outstanding voting stock
of Immuno International AG ("Immuno"), a
corporation subject to the jurisdiction of the
Commission, in violation of Section 5 of the Federal
Trade Commission Act ("FTC Act"), as amended,
15 U.S.C. § 45, and that such an acquisition, if
consummated, would violate Section 7 of the Clayton Act,
as amended, 15 U.S.C. § 18 and Section 5 of the FTC
Act, as amended, 15 U.S.C. § 45; and it appearing
to the Commission that a proceeding in respect thereof
would be in the public interest, hereby issues its
Complaint, stating its charges as follows:
I. RESPONDENT
A. Respondent Baxter is a corporation organized,
existing, and doing business under and by virtue of the
laws of the state of Delaware, with its principal place
of business located at One Baxter Parkway, Deerfield,
Illinois 60015.
B. Respondent is, and at all times relevant herein has
been, engaged in commerce as "commerce" is
defined in Section 1 of the Clayton Act, as amended, 15
U.S.C. § 12, and is a corporation whose business is
in or affects commerce as "commerce" is defined
in Section 4 of the Federal Trade Commission Act, as
amended, 15 U.S.C. § 44.
II. THE ACQUIRED COMPANY
A. Immuno is a corporation organized, existing, and
doing business under and by virtue of the laws of
Switzerland, with its principal place of business located
at Zollikerstrasse 60, CH-8702, Zollikon, Switzerland.
B. Immuno is, and at all times relevant herein has
been, engaged in commerce as "commerce" is
defined in Section 1 of the Clayton Act, as amended, 15
U.S.C. § 12, and is a corporation whose business is
in or affects commerce as "commerce" is defined
in Section 4 of the Federal Trade Commission Act, as
amended, 15 U.S.C. § 44.
III. THE ACQUISITION
On or about August 28, 1996, Baxter entered into a
Stock Purchase Agreement with Pharminvest Ltd., Albenga
Holding en Handelmaatschappij V.V. and Bio-Products and
Bio-Engineering SA to purchase the majority of the voting
stock of Immuno for approximately $462.8 million
("Acquisition").
IV. THE RELEVANT MARKETS
For purposes of this Complaint, the relevant lines of
commerce in which to analyze the effects of the
Acquisition are:
- A. the research, development, manufacture and
sale of Factor VIII Inhibitor Treatments approved
by the United States Food and Drug Administration
("FDA") for sale in the United States;
and
-
- B. the research, development, manufacture and
sale of Fibrin Sealant to be approved by the FDA
for sale in the United States.
For purposes of this Complaint, the United States is
the relevant geographic area in which to analyze the
effects of the Acquisition in the relevant lines of
commerce.
V. STRUCTURE OF THE MARKET
A. The market for the research, development,
manufacture and sale of Factor VIII Inhibitor Treatments
is highly concentrated as measured by the
Herfindahl-Hirschman Index ("HHI"). Baxter and
Immuno are the only two suppliers of Factor VIII
Inhibitor Treatments in the United States.
B. Baxter and Immuno are actual competitors in the
relevant market for the research, development,
manufacture and sale of Factor VIII Inhibitor Treatments.
C. The market for the research, development,
manufacture and sale of Fibrin Sealant is highly
concentrated as measured by the HHI. Baxter and Immuno
are two of only a small number of companies seeking FDA
approval to market Fibrin Sealant in the United States.
D. Baxter and Immuno are actual competitors in the
relevant market for the research, development,
manufacture and sale of Fibrin Sealant in the United
States.
VI. BARRIERS TO ENTRY
A. Entry into the research, development, manufacture
and sale of Factor VIII Inhibitor Treatments is difficult
and time consuming, requiring the expenditure of
significant resources over a period of many years with no
assurance that a viable commercial product will result.
The existence of broad patents governing the formulations
and the manufacture of such products make new entry both
difficult and unlikely.
B. Entry into the research, development, manufacture
and sale of Fibrin Sealant is difficult and time
consuming, requiring the expenditure of significant
resources over a period of many years with no assurance
that a viable commercial Fibrin Sealant will result. The
existence of broad patents governing the formulations and
the manufacture of such products make new entry both
difficult and unlikely.
VII. EFFECTS OF THE ACQUISITION
The effects of the Acquisition may be substantially to
lessen competition and to tend to create a monopoly in
the relevant markets in violation of Section 7 of the
Clayton Act, as amended, 15 U.S.C. § 18, and
Section 5 of the FTC Act, as amended, 15 U.S.C.
§ 45, in the following ways, among others:
- A. by eliminating direct actual competition
between Baxter and Immuno in the relevant
markets;
-
- B. by increasing the likelihood that Baxter will
unilaterally exercise market power in the
relevant markets; and
-
- C. by creating a dominant firm in the relevant
markets.
VIII. VIOLATIONS CHARGED
A. The Acquisition described in Paragraph 5
constitutes a violation of Section 5 of the FTC Act, as
amended, 15 U.S.C. § 45.
B. The Acquisition described in Paragraph 5, if
consummated, would constitute a violation of Section 7 of
the Clayton Act, as amended, 15 U.S.C. § 18, and Section
5 of the FTC Act, as amended, 15 U.S.C. § 45.
WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade
Commission on this day of A.D., 199__, issues its
Complaint against said respondent.
By the Commission.
Donald S. Clark
Secretary
SEAL:
ANALYSIS OF PROPOSED CONSENT
ORDER
TO AID PUBLIC COMMENT
The Federal Trade Commission ("Commission")
has accepted, subject to final approval, an agreement
containing a proposed Consent Order ("Order")
from Baxter International Inc. ("Baxter"),
which remedies the anticompetitive effects of Baxter's
acquisition of Immuno International AG
("Immuno"). The proposed order requires Baxter
to divest assets and undertake certain actions to restore
competition in the market for treatments of Factor VIII
inhibitors in hemophiliacs, and to license assets and
undertake certain actions to restore competition in the
market for fibrin sealant. In addition, Baxter has signed
an Interim Agreement providing that the terms of the
Consent Agreement will become effective immediately.
The proposed Consent Agreement has been placed on the
public record for sixty (60) days for reception of
comments by interested persons. Comments received during
this period will become part of the public record. After
sixty (60) days, the Commission will review the agreement
and the comments received and will decide whether it
should withdraw from the agreement or make final the
agreement's proposed Order.
Pursuant to a Stock Purchase Agreement signed August
28, 1996, Baxter agreed to purchase a majority of the
outstanding shares of Immuno, in a transaction valued at
approximately $715 million. The proposed Complaint
alleges that the acquisition violates Section 7 of the
Clayton Act, as amended, 15 U.S.C. § 18, and
Section 5 of the FTC Act, as amended, 15 U.S.C.
§ 45, in the market for the research, development,
manufacture and sale of products for the treatment of
Factor VIII inhibitors in the United States; and in the
market for the research, development, manufacture and
sale of fibrin sealant in the United States.
The proposed Order would remedy the alleged
violations. In the market for the research, development,
manufacture and sale of treatments for Factor VIII
inhibitors in the United States, the proposed Order
requires Baxter to divest its Autoplex product to a
Commission approved buyer within four months. Baxter's
Autoplex and Immuno's FEIBA are the only FDA-approved
activated prothrombin complex concentrates for the
treatment of patients with hemophilia A who have
developed an immune system response to their therapy,
known as "inhibitors". Autoplex and FEIBA act
to overcome these patients' inhibitors so that they can
be treated effectively. The acquisition would eliminate
the substantial competition between Autoplex and FEIBA.
The proposed Consent Agreement would remedy the loss of
competition by requiring Baxter to divest Autoplex to a
Commission-approved buyer within four months of the date
Baxter signed the Consent Agreement.
In Europe and Japan, fibrin sealants are used to
control bleeding and promote wound healing in a wide
variety of surgical procedures, and to treat burn and
trauma victims. Baxter and Immuno are two of only a few
companies developing fibrin sealant for sale in the
United States, and are likely to be two of the first
companies to receive FDA approval to do so. The United
States market for an FDA-approved fibrin sealants could
be as large as $400 million per year. The acquisition
would eliminate the significant on-going competition
between Baxter and Immuno in the research and
development, as well as future competition in the
manufacture and sale, of fibrin sealant in the United
States. The proposed Order remedies this loss of
competition by requiring Baxter to license Immuno's
product in development to a Commission-approved licensee
within four months of the date Baxter signed the Consent
Agreement.
The Order also requires Baxter to provide to the
Commission a report of compliance with the divestiture
and licensing provisions of the Order within sixty (60)
days following the date the Order becomes final, and
every ninety (90) days thereafter until Baxter has
completed the divestiture and licensing. The Order also
requires Baxter to notify the Commission at least thirty
(30) days prior to any change in the structure of Baxter
resulting in the emergence of a successor.
The purpose of this analysis is to facilitate public
comment on the proposed Order, and it is not intended to
constitute an official interpretation of the agreement
and proposed Order or to modify in any way their terms.
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