Baxter International Inc.; Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 971-0002]

Baxter International Inc.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting

unfair or deceptive acts or practices and unfair methods of

competition, this consent agreement, accepted subject to final

Commission approval, would require, among other things, Baxter

International (``Baxter''), an Illinois-based corporation, to divest

its Autoplex product to a Commission-approved buyer, and to license

Immuno International AG's (``Immuno'') product in development to a

Commission- approved licensee within four months of the date Baxter

signs the consent. This would resolve antitrust concerns raised by the

proposed $463 million acquisition of Immuno by Baxter, which both

manufacture a wide variety of biologic products derived from human

blood plasma.

DATES: Comments must be received on or before March 4, 1997.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: William Baer or George Cary, FTC/H-

374, Washington, D.C. 20580. (202) 326-2932 or 326-3741.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of

the Commission's Rules of Practice (16 CFR 2.34), notice is hereby

given that the above-captioned consent agreement containing a consent

order to cease and desist, having been filed with and accepted, subject

to final approval, by the Commission, has been placed on the public

record for a period of sixty (60) days. The following Analysis to Aid

Public Comment describes the terms of the consent agreement, and the

allegations in the complaint. An electronic copy of the full text of

the consent agreement package can be obtained from the FTC Home page,

on the World Wide Web, at ``http://www.ftc.gov/os/actions/htm.'' A

paper copy can be obtained from the FTC Public Reference Room, Room H-

130, Sixth Street and Pennsylvania Avenue, N.W., Washington, D.C.

20580, either in person or by calling (202) 326-3627. Public comment is

invited. Such comments or views will be considered by the Commission

and will be available for inspection and copying at its principal

office in accordance with Section 4.9(b)(6)(ii) of the Commission's

Rules of Practice (16 CFR 4.9(b)(6)(ii)).

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. Sec. 18, and Section 5 of the

FTC Act, as amended, 15 U.S.C. Sec. 45, in the market for the research,

[[Page 409]]

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.

Benjamin I. Berman,

Acting Secretary.

[FR Doc. 97-4 Filed 1-2-97; 8:45 am]

BILLING CODE 6750-01-P