Tags: Medtronic | patent | lawsuit | Edwards

Medtronic to Pay Edwards to Settle Valve Patent Lawsuit

Tuesday, 20 May 2014 08:59 AM

Medtronic Inc., the world’s biggest maker of heart-rhythm devices, will pay Edwards Lifesciences Corp. at least $1.1 billion to settle a patent dispute over their minimally invasive valves.

Edwards will receive $750 million upfront and royalties of at least $40 million a year through 2022, Minneapolis-based Medtronic said in a statement. The companies agreed to dismiss all pending litigation over the valves and refrain from filing additional lawsuits for the eight years of the agreement.

A preliminary injunction was granted by the federal court in Wilmington, Delaware, on April 11 that would prevent Medtronic from selling its CoreValve, used to treat aortic stenosis, in the U.S. because it infringes a patent held by Irvine, California-based Edwards. The injunction, which was set to go into effect in seven business days, was stayed by the court.

“We see this settlement as a clear financial positive for Edwards,” David Roman, an analyst at Goldman Sachs Group Inc., said in a note. He estimated that royalty payments of $40 million to $60 million would mean an earnings boost of 24 to 36 cents a share this year.

Edwards gained 2.9 percent to $88.98 at 8:19 a.m. New York time. Medtronic rose less than 1 percent to $60.50.

Market Estimate

Medtronic paid $700 million, plus milestone fees, to buy CoreValve in 2009, so the size of this settlement could mean that the company believes that the market for the valves is larger than the $2 billion to $2.5 billion a year it has estimated in the past, said Jason McGorman, an analyst at Bloomberg Industries in Skillman, New Jersey.

Medtronic also reported fiscal fourth-quarter earnings, excluding one-time items including a $746 million charge for litigation, of $1.12 a share, meeting the average of 21 analysts’ estimates compiled by Bloomberg. Revenue in the three months ended April 25 rose to $4.57 billion from $4.46 billion a year earlier, according to a separate statement.

The company forecast earnings of $4 to $4.10 a share for fiscal 2015, bracketing the average of $4.09 from 23 analysts’ estimates compiled by Bloomberg.

© Copyright 2017 Bloomberg News. All rights reserved.

 
1Like our page
2Share
Companies
Medtronic Inc., the world's biggest maker of heart-rhythm devices, will pay Edwards Lifesciences Corp. at least $1.1 billion to settle a patent dispute over their minimally invasive valves.
Medtronic, patent, lawsuit, Edwards
342
2014-59-20
Tuesday, 20 May 2014 08:59 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved