FTC Victory in Edwards Lifesciences Merger: 4 Key Takeaways for Life Sciences Deals

Orrick partners Eric Hochstadt, Craig Falls, and Tony Chan highlight in an article for Law360 what industry innovators in life sciences and R&D-heavy sectors can learn from the FTC’s recent win in the District of Columbia blocking Edwards Lifesciences’ proposed acquisition of JenaValve, offering practical guidance for structuring deals and navigating antitrust risks.

Key takeaways below:

• Pipeline-to-pipeline overlaps and innovation theory: The case marks the first successful challenge to a merger where both parties’ products were still in development, highlighting the FTC’s willingness to block deals based on innovation competition—even before products reach the market.
• Current innovation efforts vs. potential future competition: The court focused on how the merger would reduce present competition in research and development, rather than just future market entry – emphasizing the importance of non-price competition such as speed to market and clinical testing.
• Not every pipeline-to-pipeline deal is anticompetitive: The decision clarifies that not all mergers between pipeline competitors will harm innovation. The ruling is specific to “merger-to-monopoly” scenarios, and parties can still argue that innovation incentives remain if other significant competitors exist or if efficiencies are clearly demonstrated.
• “Weakened competitor” defenses and sell-side diligence: The court gave little weight to arguments that JenaValve was a weakened competitor due to commercialization challenges. The case also underscores the importance of “clear skies” provisions and thorough diligence, as late-breaking acquisitions can unexpectedly increase antitrust risk.