rebecca urban's article june 12 '09

CITY BEAT: Rebecca Urban | June 12, 2009
Article from: The Australian


Heart of the matter

CSL's decision to abort its Talecris Biotherapeutics acquisition amid competition concerns has poured doubts on a multi-million-dollar merger involving another Australian-made company, Heartware International.

Analyst Duane Nash of Wedbush keeps a close eye on Thoratec Corporation, a medical device giant that has lobbed a $434 million offer to buy Heartware. He has described the Federal Trade Commission's challenge of CSL's Talecris deal as "alarming".

"While we believe the Talecris merger to present more egregious anti-trust issues ... it is worth noting that a (Thoratec-Heartware) merger would result in an even greater degree of market concentration," Nash points out in a note to clients. "In any event, the Talecris situation does corroborate earlier fears that the Obama administration ... will take a very aggressive approach to anti-trust enforcement."

Thoratec is considered a leader in the treatment of cardiac diseases -- the same market where the recently collapsed heart pump maker Ventracor was operating. Thoratec announced its bid for the Australian Securities Exchange-listed Heartware, which is developing a similar but less advanced device to Ventracor's, back in February and is awaiting approval from the FTC.

Interestingly, Nash also pointed to the uncertainty surrounding Ventracor's viability as a potential risk to the merger. "We believe that a viable Ventracor can increase palatability to the FTC of the pending Heartware merger (by maintaining the presence of a separate ... competitor that is ahead ... in the developmental pathway)," he says.

Ventracor creditors have approved the sale of assets to a company set up by US-based Orqis Medical. The $10 million sale was due to be completed today.