Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The Federal Trade Commission on Monday authorized a lawsuit in the U.S. District Court for the District of Columbia to block Digene Corp.’s $420 million merger with Cytyc Corp., because of competition and bundling concerns. The agency commissioners voted 5-0 to seek a preliminary injunction. The agency is expected to file the lawsuit no later than Thursday. Both Cytyc, of Boxborough, Mass., and Digene, of Gaithersburg, Md., make diagnostic tests that screen for cervical cancer. Digene’s test is a secondary test but is likely to get approval from the Food and Drug Administration to be used as a primary test. Once that happens, the tests could compete against each other. By purchasing Digene, Cytyc would be in a position to eliminate its only existing competitor, TriPath Imaging, by limiting access to Digene’s HPV test, the FTC argued. Further, it also could impede other firms’ plans to sell liquid Pap tests in the United States. “This merger as proposed raises serious competitive concerns within the highly concentrated market for this important diagnostic tool,” said Joe Simons, Director of the FTC’s Bureau of Competition, in a press release late Monday. “As a result of the proposed acquisition, it is likely that prices would increase, product innovation would suffer, and ultimately, patient care would be compromised.” Ronald Opel, a biotechnology analyst at the research firm H.C. Wainwright & Co. Inc. in Boston, said the combined company would control about 75 percent of the U.S. market for cervical cancer screening products. Opel said Cytyc already controls 64 percent of the market for diagnostic tests that screen for cervical cancer. But Scott Keller, founder of merger research firm Dealanalystics.com in New York, said the two companies make different cervical cancer testing products. He said that Cytec’s test is still the most important because it identifies cancer cells. Digene’s test will always be a good secondary test if Cytec’s cancer cell test does not provide conclusive information. Jeffrey Hoffman, an analyst at Buckingham Research Group in New York, said both companies already have co-promotion agreements to sell each other’s products. “This is going to stay regardless of whether the deal goes through,” Hoffman said. He added that the FTC’s rejection of the merger does not bode well for Digene. Even though Digene already has had talks with other prospective acquirers such as French medical products firm Roche Holdings SA, the agency’s decision is a precedent that will discourage other buyers, he said. Copyright (c)2002 TDD, LLC. All rights reserved.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.