The Federal Trade Commission says the proposed settlement is the largest penalty ever for failing to make a required Hart-Scott-Rodino Act filing.

What happened

The Federal Trade Commission said Monday it has reached a proposed $12 million penalty deal resolving allegations that Edwards Lifesciences Corp. and Genesis MedTech Group Limited structured Edwards' acquisition of JC Medical to avoid federal premerger review under the Hart-Scott-Rodino Act.

Under the proposed final judgment, Edwards, including former Genesis subsidiary JC Medical, would pay $10 million and Genesis would pay $2 million. The FTC described the combined penalty as the largest ever for failing to make an HSR filing. FTC Chairman Andrew N. Ferguson said, "Companies that try to sneak deals through without lawful FTC review should take notice."

The agency said the settlement addresses Edwards' July 2024 acquisition of JC Medical, a medical device maker developing transcatheter aortic valve replacement devices to treat aortic regurgitation. According to the FTC, Edwards acquired JC Medical without an HSR filing and then tried one day later to acquire JenaValve Technology Inc., which the agency described as JC Medical's only competitor in U.S. clinical trials for TAVR-AR devices.

The FTC said its complaint alleges Edwards and Genesis set the JC Medical deal price at $115 million, plus milestone payments, just below the then-applicable $119.5 million size-of-transaction threshold for HSR reporting. The agency said Edwards also agreed to a contemporaneous $25 million investment in Genesis tied to the JC Medical acquisition, and that the transactions in substance exceeded the HSR reporting threshold.

Beyond the money, the proposed judgment would require Edwards to provide advance written notice to the FTC before acquiring interests in certain firms that sell, test or have FDA investigational approval for TAVR-AR devices in the United States. Edwards also would have to design, maintain and operate an antitrust compliance program.

The Commission voted 2-0 to accept the settlement and refer the matter to the U.S. Department of Justice, which filed the complaint and proposed final judgment in the U.S. District Court for the District of Columbia. The FTC press release says stipulated final orders have the force of law once approved and signed by the district judge, and that entry of the final judgment would not constitute an admission or finding of wrongdoing or liability by the defendants.