The Federal Trade Commission has undone Hologic’s purchase last year of Fischer Imaging’s mammography assets, finding that the acquisition of Fischer’s prone stereotactic breast biopsy systems business harmed U.S. consumers by eliminating Hologic’s only significant U.S. competitor for the sale of this type of product. As part of the FTC settlement, Hologic is required to sell the Fischer prone biopsy assets to Siemens.
The Federal Trade Commission has undone Hologic's purchase last year of Fischer Imaging's mammography assets, finding that the acquisition of Fischer's prone stereotactic breast biopsy systems business harmed U.S. consumers by eliminating Hologic's only significant U.S. competitor for the sale of this type of product. As part of the FTC settlement, Hologic is required to sell the Fischer prone biopsy assets to Siemens.
The FTC concluded that Siemens, as an established supplier of breast cancer-related imaging products, is well positioned to manufacture and sell prone stereotactic breast biopsy systems in the U.S. If the commission determines, however, that Siemens is not an acceptable purchaser of these assets or that the divestiture is not acceptable, the order would require Hologic to unwind the sale and divest the assets to another FTC-approved buyer within six months of the order becoming final.
The order is subject to public comment until Aug. 5, 2006, after which the commission will decide whether to make it final. If it does, Hologic will have six months to divest the relevant assets, or the commission may appoint a trustee to do so.
The deal between Hologic and Fischer was made Sept. 29, 2005, when Hologic paid $32 million to acquire all of Fischer's intellectual property and other assets related to its mammography and breast biopsy businesses. Among those assets were patents, trademarks, and customer and vendor lists for Fischer's MammoTest prone stereotactic breast biopsy systems product. At the time, Fischer was Hologic's only significant competitor in the U.S. market for this type of product, according to the FTC.
One other firm, Giotto USA, sold - and continues to sell - such a biopsy system in the U.S., but the FTC does not consider it to be a significant competitor. Giotto has achieved only minimal U.S. sales of this product in its three years on the market and lacks the infrastructure, track record, and reputation to compete effectively, according to the FTC. It also lacks access to critical patents needed to enhance its technology. Consequently, the sale by Fischer of its rights to develop, market, and sell the MammoTest in the U.S. provided Hologic with a "virtual monopoly," according to the commission.
The Hart-Scott-Rodino Premerger Notification Act (HSR Act) typically prevents such monopolies from occurring. It failed to do so in this case, because the $32 million purchase was less than the $56.7 million filing threshold.
Recognizing the problem, the FTC stepped in, alleging that the deal violated Section 7 of the Clayton Act and Section 5 of the FTC Act by eliminating Hologic's only significant competitor in this segment of the U.S. market. The commission not only dismissed Giotto as a significant competitor but concluded that other companies were not likely to enter this marketplace, due to the strength and breadth of Hologic's patent portfolio in this area, which had been bolstered by patents acquired from Fischer.
Hologic's MultiCare biopsy product product, the only such product ever to compete effectively with Fischer's MammoTest, could be sold in the U.S. market only under a license citing the Fischer patents that Hologic acquired as part of a previous settlement of patent infringement litigation. As part of the FTC charge, Hologic will retain a license to Fischer's prone biopsy patents to ensure that it can continue to compete in the U.S. in this marketplace.