FTC Asks Medtronic to Divest Fiagon to Remove Barrier to $1.1 Billion Intersect ENT Takeover

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Diving Brief:

  • The Federal Trade Commission said Medtronic sells Fiagon to eliminate a barrier to its $1.1 billion buyout ENT intersection. The regulator called for the divestment to halt the consolidation of the markets for ear, nose and throat navigation systems and balloon sinus dilation products.
  • Cut sketched plans sell Fiagon, which he bought in a 60 million euros ($63.3 million at Wednesday’s rate) agreement in 2020, to Hemostasis in March as part of the FTC’s review process. The agency confirmed that Medtronic must discharge Fiagon within 10 days of acquiring Intersect.
  • The agreement also requires Medtronic and Intersect to obtain 10 years of pre-approval from the FTC before purchasing ENT navigation systems and balloon sinus dilation assets. The agency inserted the clause to prevent consolidation that could drive up the cost of health care in the United States

Overview of the dive:

Fiagon became the fourth company in the US balloon sinus dilation market last year, settle alongside Johnson & Johnson’s Acclarent and Stryker’s Entellus Medical in the small group of companies seeking to challenge Medtronic’s position in the industry.

Medtronic’s $1.1 billion takeover of Intersect would neutralize this emerging threat while simultaneously shrinking the field of ENT navigation, where the medical technology company competes with Acclarent, Stryker, Brainlab, Karl Storz and Fiagon.

Intersect, anticipating how reduced competition would play out with the FTC, found a buyer for Fiagon earlier this year. The FTC accepted the proposal, positioning Hemostasis to challenge Medtronic in the markets.

“Hemostasis is an established player in the ENT medical device segment and has the expertise, sales infrastructure, and resources to restore competition that would otherwise have been lost following the acquisition,” the FTC wrote. in his analysis. “Hemostasis will be able to begin manufacturing its own offering of ENT navigation systems and balloon sinus dilation products from day one.”

The agreement allows Hemostasis to immediately enter the market as it will acquire all assets related to Fiagon’s business and obtain all third party consents before the takeover closes. Hemostasis plans to retain Fiagon employees.

The FTC presented the divestiture as a way to prevent Medtronic’s takeover of Intersect from driving up prices and reducing innovation. The regulator appointed Jeryl Hilleman to monitor companies’ compliance with the order.

Medtronic commented on the order in an emailed statement.

“In August 2021, we announced our intent to acquire Intersect ENT, expanding Medtronic’s otolaryngology portfolio,” the company said. “The acquisition is expected to close during the first quarter of our fiscal 2023 ending July 29, 2022, subject to the satisfaction of customary closing conditions. We will announce more details after a successful closing.

The company declined to provide further comments specific to the assignment.

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