J&J to Sell Wrist-Fracture Treatment as Part of Synthes Deal

The Federal Trade Commission said Monday it will require Johnson & Johnson JNJ to sell its system for surgically treating serious wrist fractures to rival Biomet Inc. as a condition of its $21.3 billion bid for medical-device maker Synthes Inc.
The federal agency said the divestiture would resolve an FTC complaint that alleged the company’s Synthes deal would illegally reduce competition for certain wrist treatments.
J&J intends to sell its system, known as DVR, along with the rest of its product line for treating traumatic injuries, to Biomet, the FTC said. J&J purchased the DVR system from Hand Innovations in 2006 and the systems accounted for 29% of all similar system sales in 2010, the FTC said.Both J&J and Switzerland-based Synthes together would have more than 70% of the U.S. market for the wrist-fracture treatment systems, according to the FTC.
The companies both produce or distribute trauma, spine and shoulder replacement devices, as well as devices to treat facial and skull fractures.
“J&J and Synthes are direct competitors for these important systems used in the surgical treatment of traumatic wrist fractures,” said Richard Feinstein, director of the FTC’s Bureau of Competition. “This order will ensure that the hospitals and surgeons that use these systems to care for consumers will not face higher prices or reduced innovation in the future.”
J&J late last week said it plans to set aside an additional $600 million in its second quarter for potential legal settlements, as it deals with a series of lawsuits over accusations of bribery and improper drug-marketing practices.
The company in April said its first-quarter earnings rose on a foreign-exchange-related gain tied to the Synthes acquisition deal and lower expenses.
Source:Ben Fox Rubin.http://online.wsj.com