The world's second-largest plasma products maker, Australia's CSL, had its ambitions derailed to become the world's biggest with the acquisition of rival Talecris Biotherapeutics, by the US Federal Trade Commission (FTC) blocking the takeover yesterday.
CSL had in August last year, agreed to acquire Talecris for $3.1 billion, which would have made the Melbourne-based plasma maker one of the world's leaders in plasma-derived and recombinant products.
In a meeting with CSL's managing director, Dr Brian McNamee with the US Federal Trade Commission in Washington, McNamee was told that after reviewing CSL's case and remedy proposals, the regulator ad recommended that the commissioners initiate legal action in the US District Court to block the transaction.
A vote and decision by the commissioners is imminent, and is likely to be announced by Thursday, 28 May 2009. After that the company will decide whether to contest the decision or not, CSL said.
The FTC has ruled against the acquisition on anti-trust grounds, as CSL is the second largest producer of plasma products in the US, behind the world leader, the US-based companies, Baxter International, and Talecris Biotherapeutics, being the North Carolina-based Talecris being the third.
The acquisition of Talecris would have made CSL the leader in the$15-billion global market for plasma-derived and recombinant products.
Since the three companies combined have 83 per cent share of the US market, the FDC felt that the acquisition would give CSL an advantage in pricing over its other competitors in the US $7.5 billion plasma industry.
CSL is also a major manufacturer in the $2-billion influenza industry by manufacturing, selling and distributing a comprehensive range of vaccines, antivenoms and other pharmaceutical products worldwide.
In August, CSL had raised approximately $1.9 billion through share issue to fund the acquisition, which the company may have to return to its shareholders if the deal is finally blocked, apart from having to pay a break fee of $75 million.
President Obama's administration had said that it would act tough on competition issues and ironically, this decision by the FDC came even as the US government has made available $1 billion for the production of the swine flu vaccine to five drug companies, of which one is likely to be CSL.
North Carolina-based Talecris, having additional regional headquarter in Toronto, Canada, and office in Frankfurt, Germany, is owned by the private equity groups Cerberus Partners and Ampersand Ventures.
Talecris's revenue in 2008 was approximately $1.4 billion in 2008. Talecris makes and sells plasma therapies and has 56 collection centres and two factories in the US.
In 2005, Talecris acquired the contributed assets of the worldwide plasma business of Bayer BP and the additional fractionation capacity and contract manufacturing services of Precision Pharma Services.
The CSL group has major facilities in Australia, Germany, Switzerland and the US and has over 10,000 employees working in 27 countries with 2008 revenue of $2.97 billion.
Human plasma is the liquid portion of the blood that remains after the red cells, white cells, and platelets have been separated out. 92 per cent of plasma is water; however, the other 8 per cent contains proteins and antibodies.
Almost 500 different types of protein have been found in human blood plasma. Many of these proteins and antibodies can be used to manufacture prescription drugs that manage serious and often life-threatening conditions.
Both CSL and Talecris collect plasma from various donors through their wide network of blood collection centers and plasma-based products such as CSL's Privigen and Talecris's Gamunex are used to treat diseases of the nervous system.