Medtronic has infringed on a patent of Edwards LIfesciences, a U.S. federal court has ruled, and has ordered the company to pay $392.5 million. in damages.
A U.S. Court found that Medtronic willfully infringed on an Edwards Lifesciences patent related to its Sapien transcatheter heart valves and ordered the device maker to pay $392.5 million in damages. Both companies announced the news Wednesday.
On the face of it, this seems to be a bit of welcome news for Edwards Lifesciences, whose efforts to block Medtronic's competing product in Europe have been thwarted to a certain extent. In the U.S., Edwards has the only approved transcatheter valve replacement system while Medtronic is expected win FDA approval for its rival CoreValve product in a couple of months. In the near future, the two companies are going to have to battle it out for physicians’ (and hospitals’) hearts and minds.
So the ruling will likely be well received at Edwards. But analyst Danielle Antalffy of healthcare investment bank Leerink Swann seems to believe that investors will largely brush off this news for a few reasons.
1) Medtronic will appeal and that process can take up to 14 to 18 months.
2) The court did not – and most likely will never – forbid Medtronic from selling CoreValve in the U.S. [a decision on Edwards’ request to bar CoreValve is pending, according to an Edwards news release.]
3) Edwards briefly won the battle in Germany where a judge asked Medtronic to withdraw CoreValve from the market, before a higher court overruled that ruling late last year.
4) A reversal of this ruling in the appeals process is likely given that Medtronic ultimately given that Medtronic ultimately won the patent case – known as the Cribier patent- in Europe.
Medtronic executives feel the same way.
“While we are disappointed in the jury’s verdict, we continue to believe that this decision will be overturned on appeal,” said Neal Ayotte, vice president and acting general counsel at Medtronic, in a news release.
The Minnesota company also reiterated its expectation of winning regulatory approval for CoreValve to treat patients with artery blockage who are too sick to undergo open-heart surgery at the end of fiscal 2014, which is at the end of April.
Meanwhile, at Edwards, the company is gearing up for a permanent injunction to bar Medtronic from selling CoreValve.
“As the long time leader and innovator in heart valves, Edwards invests in promising early technologies. As a result, Edwards holds a number of important patents in transcatheter valve technology, and we intend to continue to defend this intellectual property when it is used by others without permission,” said Larry Woos, Edwards’ corporate vice president, transcatheter heart valves, in Edwards' release.