Blog Tag: FTC

Medtronic acquires Intersect ENT, sells Fiagon to Hemostasis LLC as required by FTC

On May 13, 2022, Medtronic, Inc. announced that it completed the acquisition of Intersect ENT, Inc.  The transaction was only able to gain approval of the Federal Trade Commission (FTC) upon the agreement that Medtronic sell the assets of Fiagon NA Corp., a key subsidiary of Intersect ENT.  Medtronic sold Fiagon to Hemostasis LLC and was thereupon able to finalize the acquisition of Intersect ENT.

As a result of the transaction, Medtronic acquired Intersect ENT’s PROPEL™ and SINUVA™ (mometasone furoate) sinus implant product lines and technology, intellectual property, and Intersect ENT’s facility in Menlo Park, CA.  Intersect ENT employees joined Medtronic as a result of the acquisition.

SINUVA is an FDA-approved biosorbable, steroid-eluting implant that, according to Intersect ENT, is clinically proven to reduce polyps and symptoms of nasal congestion.  PROPEL is also an FDA-approved biosorbable, steroid-eluting implant, indicated for patients with chronic rhinosinusitis (CRS).  The PROPEL implant, which has reportedly also received CE mark clearance in Europe, is designed to keep sinuses clear after an endoscopic sinus procedure, while the SINUVA device is inserted to treat nasal polyps that develop after ethmoid sinus surgery.

Medtronic reports that acquiring Intersect ENT’s product lines and customer base will further Medtronic’s efforts to help patients who suffer from chronic rhinosinusitis, reported to be one of the most common health care problems in the U.S.

The FTC’s Bureau of Competition investigated the planned acquisition of Intersect ENT and determined that Medtronic, Inc., a wholly owned subsidiary of Medtronic plc, and Intersect ENT violated Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45.

An agreement was reached between Medtronic, Intersect ENT, and the FTC, pursuant to which Fiagon was sold to Hemostasis LLC.

Fiagon makes ear, nose, and throat navigation systems and balloon sinus dilation products.  According to the draft Complaint prepared by the FTC, without this divestiture, the acquisition of Intersect ENT by Medtronic would pose a threat to future competition in the United States for both ENT navigation systems and balloon sinus dilation products.

The press release by Medtronic is available here.

 

An example provided in InfoArmor's July 2016 report regarding the type of data hackers were able to obtain

Hackers Steal 600K Records from Health Care Firms – Could Your Wearable Device Be Next?

Security firm InfoArmor published a report in late July 2016 stating that a group of attackers infiltrated American health care institutions, stole at least 600,000 patient records and attempted to sell more than 3 terabytes of that associated data.  In an interview with eWeek, chief intelligence officer Andrew Komarov noted that the hackers he investigated were able to compromise different health care institutions such as private clinics, vendors of medical equipment, and suppliers.  Once inside the compromised systems, the hackers were able to take personally identifiable information and medical data, including imaging data (as shown to the right).

Komarov’s research should come as no surprise in view of a report issued by the Brookings Institute in May 2016 reporting that 23% of all data breaches occur in the healthcare industry.  In fact, nearly 90% of healthcare organizations had some sort of data breach between 2013 and 2015, costing the healthcare industry nearly $6.2 billion.

According to a report done by Bloomberg BNA, while a number of legal mandates exist (e.g. the Health Insurance Portability and Accountability Act (HIPAA), the Health Information Technology Certification Program, and the Food and Drug Administration’s (FDA) premarket review), the existing guidelines are limited.  Furthermore, medical devices face certain unique cybersecurity pitfalls.  For example, while HIPAA applies to protect health information regardless of where it’s stored, protected health information that exists on disposed of or nonfunctional medical devices can be overlooked.

Connected medical devices (i.e., medical devices that can transmit information through the internet or a networked system) also pose unexpected risks and challenges.  For example, the ability for hackers to remotely access connected medical devices can hypothetically result in significant threats to patient health and safety.  A 2012 episode of the television show Homeland featured a character hacking into and manipulating the pacemaker of the fictional vice president.  While such situations seem far-fetched, in an interview on “60 Minutes,” it was revealed that Vice President Dick Cheney’s doctor had actually disabled the wireless functionality of his heart implant, fearing that it might be hacked in an assassination attempt.

While such fears may seem fueled by paranoia, recent studies have shown that such security threats may be a real concern.  Bloomberg Businessweek reported in November 2015 that the Mayo Clinic engaged a number of high-profile “white hat” hackers to conduct a study of cybersecurity vulnerabilities in their medical devices.  These “white hat” hackers worked on a number of different medical devices, including things such as cardiac monitors, infusion pumps, and hospital beds. In one alarming example, one hacker was able to gain control of an infusion pump – the Hospira Symbiq Infusion System – and was able to remotely cause it to deliver a potentially lethal dose of medication.  Shortly thereafter, the FDA issued a safety notice recommending a recall and the stopped usage of the aforementioned pump.

With increasing concerns about cybersecurity, as discussed on this blog previously, the FDA is currently seeking comment on proposed guidelines that outline when software changes to medical devices would require manufacturers to submit a premarket notification.

FTC Approves Tornier and Wright Medical Merger

FTC Approves Tornier and Wright Medical Merger

The U.S. Federal Trade Commission (FTC) recently issued a final order that conditionally approves the merger between Amsterdam, Netherlands-based Tornier N.V. and Memphis, Tennessee-based Wright Medical Group, Inc.  Reuters reports that the all-stock transaction is valued at about $3.3 billion.  Plans for the merger were first announced in October 2014, and approved by the shareholders of both companies in June 2015, subject to receipt of clearance by the FTC.  Progress on the transaction was suspended when the FTC expressed concerns that the merger would reduce competition for total ankle replacements and total silicone rubber (silastic) toe replacements in the U.S. market.

The FTC’s Bureau of Competition enforces U.S. antitrust laws and works with the Bureau of Economics to investigate alleged anticompetitive business practices.  On occasion, the Bureau urges the Commission to take law enforcement action. In this case, the FTC’s concerns were the final obstacle to the proposed merger. The recent final order, which follows a mandatory public comment period, settles the FTC’s allegations of anticompetitive behavior.

The order calls for Tornier to sell a portion of its U.S. assets and IP rights to Integra Lifesciences Corporation (NASDAQ: IART), a competitor in the U.S. orthopedics space, which is based in Plainsboro, New Jersey.  The newly combined company will be required to provide Integra with ankle and toe replacement products for up to three years. Through this arrangement, the FTC seeks to foster competition in the affected market.

In addition to its upper and lower extremity portfolio, the merged companies will  maintain a presence in the growing biologics market.  Wright Medical recently obtained FDA approval on the Augment bone graft material (left), which is as an alternative to autograft in a variety of arthrodesis procedures.  Tornier has developed a line of biologics that includes its BioFiber line of absorbable scaffolds and its Conexa reconstructive tissue matrix, both of which are used for soft tissue repair.

The U.S. market for cell-based therapies for musculoskeletal injuries (orthobiologics) is valued at over $1.5 billion and is expected to grow significantly in 2016.  Other market participants in the orthobiologics space include Dublin, Ireland-based Medtronic (NYSE: MDT), San Diego, California-based NuVasive (NASDAQ: NUVA), Kalamazoo, Michigan-based Stryker (NYSE: SYK), and Johnson and Johnson’s West Chester, Pennsylvania-based DePuy Synthes (NYSE: JNJ).  Orthobiologics are part of the growing field of regenerative medicine, which includes bioprinting and stem-cell based therapies, and is projected to be worth $6.5 billion in the U.S. by 2019.  Bioprinting, itself, has received recent investment and growth.

Following the merger, the resulting company will be renamed Wright Medical Group, N.V. and will be incorporated and headquartered in the Netherlands.

US and EU Regulatory Agencies Approve $43B Medtronic & Covidien Merger

Med Device Online reports that Medtronic has been cleared by the Federal Trade Commission (“FTC”) and EU’s European Commission to merge with Covidien.  Also according to Med Device Online, the companies had to agree that Covidien would sell Stellarex, its drug-coated balloon stent business division, to Spectranetics for $30M USD in order to obtain FTC and European Commission approval for the merger.

The FTC originally issued an administrative complaint against the merger. The FTC noted in its complaint that C.R. Bard, Inc. is currently the only supplier of drug-coated balloon catheters indicated for the femoropopliteal artery.  In addition, Medtronic and Covidien are the only two companies seeking FDA approval for drug-coated balloon catheters indicated for the femoropopliteal artery (both companies are now in clinical trials).  Therefore, in its complaint the FTC held that without the sale of Stellarex, Medtronic’s acquisition of Covidien would likely create an unfair and anti-competitive advantage for the companies in that market space.  On Nov. 26, 2014, following the companies’ agreement to sell Stellarex, the FTC cleared the merger on unanimous approval.

The European Commission noted that Stellarex, which recently obtained promising results from its first clinical trials, competes directly with Medtronic’s leading drug-coated balloon device, the “In.Pact.”  Therefore, despite (or perhaps due to) there being few active competitors in that market, the European Commission found it likely that Covidien would have competitively constrained Medtronic and that the acquisition would remove a credible future competitor from an already-dense market, thereby reducing innovation in the field of drug-coated balloon catheters.  Following the FTC’s lead, the European Commission gave its approval of the merger on Nov. 28, 2014.

According to Medtronic, the deal is scheduled to close in early 2015.

According to its website, Medtronic is headquartered in Minneapolis, Minnesota, and operates in more than 140 countries. Medtronic is the world’s 3rd largest medical device company, developing and manufacturing devices and therapies to treat more than 30 chronic diseases, including: heart failure, Parkinson’s disease, urinary incontinence, Down’s syndrome, obesity, chronic pain, spinal disorders, and diabetes.

According to its website, Covidien is headquartered in Dublin, Ireland, and also operates globally.  The company, which was spun off from Tyco International in 2007, develops and manufactures medical devices and supplies, for varied applications, including: vascular therapy, airway and inhalation therapy, oximetry and medical monitoring, soft tissue repair, and general surgery.