AstraZeneca Turns to Auction to Unload Device, Dental Business In an effort to focus solely on it

AstraZeneca Turns to Auction to Unload Device, Dental Business

In an effort to focus solely on its core medicine business, pharmaceutical giant AstraZeneca has begun a $2.1 billion auction of Astra Tech Inc., its dental implants and medical devices division. The move is in direct opposition with competitors such as Novartis International AG and GlaxoSmithKline plc, which are diversifying their market opportunities.

By mid-April, more than ten companies had submitted bids for Mölndal, Sweden-based Astra Tech, which makes catheters and breathing aids as well as dental devices. Bidders include private equity firms Bridgepoint and Cinven, both based in London, England, and PAI Partners of Paris, France. Private equity investment firm Warburg Pincus LLC of New York, N.Y., and orthopedic manufacturing conglomerate Zimmer Holdings Inc. of Warsaw, Ind., also placed bids. Some companies only are interested in dental implants, while others are interested strictly in medical devices.

Last year, AstraZeneca appointed JP Morgan Chase & Co. to conduct a strategic review of its Astra Tech division. JP Morgan is offering financing to bidders; second-round bids are expected toward the end of May.

AstraZeneca paid $1.1 billion in a settlement of protracted dispute with British and U.S. authorities last month. The company had set aside $2.3 billion for this potential liability, meaning profit targets for the year could be lifted by nearly 7 percent.

California Jury Sides With St. Jude in Trade Secrets CaseSt. Jude Medical Inc. was awarded $2.3 billion after a California jury found that a former employee and the Chinese medical device firm he founded stole trade secrets.

“We did not expect such a high damages result,” Rita Bojalian, senior counsel for St. Jude Medical, said about the case against former employee Yongning Zou and Suzhou, China-based Nervicon Co. Ltd. Pacesetter Inc., St. Jude’s cardiac rhythm management division, won $947 million for past damages against Zou and Nervicon in addition to $868.5 million for future economic loss and $500 million for punitive damages. The company initially had hoped for about $300 million excluding punitive damages. Pacesetter is located in Sylmar, Calif.

Zou, a former principal hardware designer, was accused of stealing a document relating to a crystal oscillator unique to St. Jude’s products.

Zou left St. Paul, Minn.-based St. Jude Medical in late June 2009 and became a shareholder in Nervicon, which was formed just weeks earlier. About one month later, Statek Corp., the manufacturer of the crystal oscillator, received a request from Nervicon to make a product using specifications that were identical to St. Jude’s—Nervicon also produced a document bearing the words, “SJM Part Number.”

Court documents show that Zou holds a 47.5 percent stake in Nervicon.

“Zou has and will continue to provide Nervicon with additional proprietary and confidential documents and information in effort to deceivingly and unfairly compete against St. Jude or its affiliates,” a statement from Pacesetter read in court documents.

“The jury told us they wanted to send a message: Don’t steal trade secrets from your company and expect to profit from them for yourself,” Bojalin said.