Disc-O-Tech, a privately held company based in Herzeliyah, Israel, must sell off its Confidence product line before federal antitrust authorities will allow Kyphon, Sunnyvale, Calif., to acquire its spine-related assets, according to a complaint and consent order that the Federal Trade Commission filed today.
In December 2006, Kyphon agreed to buy the assets, intellectual property and sales agreements for $220 million, of which $120 million was for Confidence, a putty-like cement used to treat vertebral compression fractures.
Kyphon, according to the FTC, controls 90% of the market, by revenue, on products for the minimally invasive treatment of vertebral compression fractures. The FTC complaint characterizes Confidence as the only product currently on the market that is likely to provide significant and unique competition to Kyphon in the near term and is poised to take a significant share of Kyphons sales.
The FTC notified the companies last month that the government would not block the other part of the deal, which includes spinal-fusion system B-Twin Expandable and the vertebral compression-fracture repair system Sky Bone Expander, technologies not yet approved for use in the U.S.
The consent order is subject to public comment. If approved by the FTC, Disc-O-Tech would have to divest Confidence within 60 days to a suitor blessed by the commission. Meanwhile, the FTC and Justice Department have cleared Medtronic to buy Kyphon for $3.9 billion. -- by Gregg Blesch
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