By Jeffrey May, J.D.
Global health care company Grifols S.A. received FTC approval today to proceed with its acquisition of Biotest US Corporation subject to the divestiture of plasma collection centers in three local markets in the United States. Grifols and Biotest are the only two companies with plasma collection centers in these three geographic areas: (1) Lincoln, Nebraska; (2) Augusta, Georgia; and (3) Youngstown, Ohio. The FTC also expressed concern that the deal, as originally proposed, would have harmed the U.S. market for hepatitis B immune globulin, or HBIG, a plasma-derived injectable medicine that provides hepatitis B antibodies for preventing hepatitis B infections, as it would have eliminated substantial competition between ADMA Biologics, Inc., which is the largest supplier of HBIG and partly owned by Biotest US, and Grifols, the third-largest HBIG supplier. These concerns were resolved by Biotest US transferring ownership of all ADMA stock to its parent, The Biotest Divestiture Trust. Thus, it is not part of the acquisition. Grifols would be prohibited from directly or indirectly acquiring any ownership interest in ADMA under the proposed FTC consent order (In the Matter of Grifols, S.A., FTC Dkt. C-4654, File No. 181 0081).
The FTC complaint identifies two relevant markets impacted by the transaction: (1) the development, license, manufacture, marketing, distribution, and sale of hepatitis B immune globulin in the United States; and (2) the collection of human source plasma in the three local markets. According to the complaint, without the divestitures, the proposed transaction would likely substantially lessen competition: (1) by increasing the likelihood that Respondent Grifols would unilaterally exercise market power in the market for hepatitis B immune globulin; (2) by eliminating actual, direct, and substantial competition between Grifols and Biotest US in the market for the collection human source plasma; (3) by increasing the ability of the merged entity unilaterally to decrease donation fees in the market for the collection of human source plasma; and (4) by reducing incentives to improve service or quality in the market for the collection of human source plasma.
In addition to requiring the divestiture of plasma collection centers in the three cities, the proposed FTC consent order would prohibit Grifols from acquiring an ownership interest in ADMA. The company also would be barred from obtaining any rights to nominate or obtain representation on the Board of Directors of ADMA. In addition, Grifols must provide notification prior to any future acquisition of ownership interest in ADMA or any of the other divested plasma collection center assets. The acquirer of the divestiture assets, Kedplasma, is a subsidiary of Kedrion, which operates plasma collection centers in the United States, Germany, and Hungary.
Grifols issued a statement today that it has completed the transaction. The transaction has been approved by all competent regulatory authorities, it was noted.
Attorneys: Colin Kass (Proskauer Rose LLP) for Grifols, S.A. and Grifols Shared Service North America, Inc. Christina Perez for FTC.
Companies: Biotest Pharmaceuticals Corp.; Biotest US Corp.; Grifols S.A.; Kedplasma LLC; Kedrion Biopharma Inc.
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