Immucor Drops the Most Since 1987 on Antitrust Probe (Update1)

April 24 (Bloomberg) -- Immucor Inc., a maker of products used in blood screening, had its biggest decline in two decades in Nasdaq trading after saying it was subpoenaed in a U.S. Justice Department antitrust investigation.

The Norcross, Georgia-based company dropped $5.63, or 27 percent, to $15.35 at 4 p.m. It was the biggest percentage drop since Oct. 19, 1987.

The Justice Department is looking into “possible violations of the federal criminal antitrust laws in the blood reagents industry” and has requested documents dating to September 2000, Immucor said today in a statement. The Federal Trade Commission has been investigating since 2007 whether Immucor violated antitrust laws or restricted price competition.

“You have the FTC thing out there and then you add this -- maybe some people say it’s not worth it,” David Turkaly, an analyst at Susquehanna Financial Group in New York, said in a telephone interview today. “It’s going to take time for this to play out. The risk of knee-jerk reactions in this kind of environment can be severe.”

Immucor’s products are used by hospital blood banks, labs and blood donor centers to test for blood type and antibodies before transfusions. It competes in the U.S. primarily with Ortho Clinical Diagnostics, a unit of Johnson & Johnson, according to Turkaly.

Scope Unclear

It isn’t clear whether the Justice Department’s Atlanta office, which served the subpoena, is looking at other companies, Michele Howard, a spokeswoman for Immucor, said today in a telephone interview.

Stephanie Fagan, a spokeswoman for Ortho Clinical Diagnostics, declined to comment. The unit accounts for less than 3 percent of annual sales for New Brunswick, New Jersey- based J&J, the world’s largest maker of health-care products.

Justice Department spokeswoman Gina Talamona in Washington confirmed the agency’s investigation of the industry.

Immucor said in October 2007 that the Federal Trade Commission was reviewing three acquisitions the company made from 1996 to 1999 and whether the company violated antitrust laws or engaged in unfair methods of competition by restricting price competition. The company said in its most recent quarterly filing with the U.S. Securities and Exchange Commission that it was cooperating with the FTC.

Price Increases

Immucor bought Dominion Biologicals Ltd. for $8.5 million in 1996, Gamma Biologics Inc. for $23 million in 1998 and Biopool International Inc.’s blood bank division for $4.5 million in 1999.

The company started raising prices about 2001, after the acquisitions and after Ortho Clinical increased its prices, Turkaly, of Susquehanna Financial Group, said. While some of the tests cost only $5 or $6 each, some prices doubled in the course of a year, he said.

Price increases accounted for $5.9 million of Immucor’s $8.3 million in revenue growth in the fiscal third quarter ended Feb. 28, Richard Flynt, the company’s chief financial officer, told investors on a April 7 conference call.

To contact the reporters on this story: Catherine Larkin in Washington at clarkin4@bloomberg.net

To contact the editor responsible for this story: Reg Gale at Rgale5@bloomberg.net