FTC Looking at Tokos Bid for Physiologic

Tokos Medical Corp. said Monday that its planned $33-million acquisition of an Atlanta company may be delayed because the Federal Trade Commission wants more information on possible antitrust implications of the merger.

Tokos, a medical equipment company that makes a uterine-monitoring device, is scheduled to complete its acquisition of Physiologic Diagnostic Service Inc. on Aug. 15.

But the FTC notified Tokos that the agency will issue a subpoena soon to obtain further information on whether the merger would give Tokos a monopoly on the device, which helps doctors detect the onset of premature births.

Tokos wants to acquire the tiny Atlanta firm because it is further along in obtaining approval from the U.S. Food and Drug Administration. The FDA has approved the devices now for use at full-term labor.

The market for the devices could be as much as $1.5 billion to $1.8 billion a year, according to the New York brokerage firm of Donaldson, Lufkin & Jenrette Securities Corp.

“The market, as we see it, is very large,” said Roberta Walter, a Donaldson, Lufkin analyst. “Because of this and the fact it is a young industry, we would expect ultimately the FTC will not have a problem with this acquisition moving ahead.”

Craig Davenport, Tokos’ president, said he believes that the FTC is simply assuaging the fears of “an envious competitor.” Tokos, which became a publicly traded company in March, earned $616,000 on revenue of $58.8 million in 1989. Privately held Physiologic’s revenue during that period was $3.5 million to $4 million.

Davenport said the subpoena would require “a huge shopping cart of information” about the industry, but he said he intended to comply fully with the FTC.

Tokos has two primary competitors--Healthdyne Inc. in Marietta, Ga., and Carelink Corp. in Irvine. Neither competitor has FDA approval yet for pre-term use of the monitoring devices.

Beattie DeLong, Carelink’s president, said his company had not filed any kind of complaint with the FTC regarding Tokos. Officials at Healthdyne could not be reached for comment.