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PerkinElmer Drops Legal Actions Against MDS, Life Tech; FTC Gives Nod to Analytical Technologies Sale

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This story originally ran on Jan. 27 and was updated to include information about the FTC's approval of the MDS Analytical Technologies sale to Danaher.

Legal action by PerkinElmer that had threatened to hold up Danaher's purchase of Applied Biosystems' and MDS' mass spectrometry joint venture were cleared this week, paving the way for Danaher to proceed with the $1.1 billion deal.

Separately, the US Federal Trade Commission provisionally approved the sale of MDS' Analytical Technologies division to Danaher this week.

On Jan. 25, MDS announced that it and PE had settled on a dispute concerning a joint venture the two companies had to develop inductively couple plasma mass spectrometers. A day later, PE withdrew a lawsuit it had filed against MDS, its Analytical Technologies business, and Life Technologies, the parent firm of ABI, alleging they were infringing on patents covering mass spec technology that PE purchased last year.

In the latter case, PE filed its lawsuit against Life Tech, MDS, and MDS Analytical Technologies on Jan. 20 and withdrew it on Jan. 26. In the suit, PE claimed that the defendants infringed on five patents that, in general, cover methods and apparatuses related to mass spectrometry [See PM 1/22/10]. Specifically, the company claimed that the ABI/MDS QStar line of mass specs infringed on the patents.

The QStar was developed as part of the ABI/MDS mass spec joint venture that Danaher is in the process of acquiring. Danaher was not named as a defendant in the lawsuit.

The patents were originally assigned to Analytica of Branford, which PE acquired in May 2009. AOB developed mass specs and ion source technologies with applications in environment analysis, pharmaceutical and nutraceutical materials analysis, forensics, and food safety.

In its complaint, PE said that it informed the defendants of the infringement of its patents on Sept. 2, 2009, the day that the proposed purchase of the ABI/MDS mass spec joint venture and acquisition of MDS Analytical Technologies by Danaher was announced.

On deadline PE did comment on either its settlement with MDS or its withdrawal of its lawsuit. It did not provide a reason in court documents for the withdrawal.

Just a day earlier, though, it reached a settlement with MDS over a dispute concerning their joint venture agreement on ICP-MS platforms. As part of MDS' plan to sell the Analytical Technologies business to Danaher, MDS needed to get PE's consent. Instead, in December, PE filed a Notice of Application in Canadian court against Toronto-based MDS, seeking other possible remedies, including an injunction against the sale of Analytical Technologies to Danaher.

As recently as two weeks ago, PE CEO Robert Friel told analysts at the JP Morgan healthcare conference in San Francisco that his company wanted its JV with MDS to remain with MDS and not be "outsourced" to Danaher.

On Monday, though, MDS said that PE had agreed to drop its litigation against it. The two companies had been scheduled to appear in Commercial Court in Toronto the same day.

The terms of the settlement were not disclosed. MDS reiterated that the sale of Analytical Technologies remains on track to close by the end of the first quarter.

Both MDS and Life Tech declined to comment.

Separately, the FTC on Wednesday provisionally approved the sale of MDS Analytical Technologies to Danaher. The agency required the sale of MDS' Arcturus laser microdissection business in order for the sale to proceed, however.

MDS has agreed to sell the business to Life Tech.

In a statement, the FTC called laser capture microdissection "a key tool for scientific research" and added that Danaher and MDS are half of only four North American suppliers of such devices. The original acquisition would have combined Arcturus with Danaher's Leica brand of laser capture microdissection devices.

"The FTC contends that the combination woud have led to increased prices and decreased innovation for this type of equipment," it said.

In a statement, MDS said that "all other requisite regulatory approvals required for the completion of the acquisition have now been received."

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