Medtronic Has to Withdraw CoreValve in Germany After Losing Patent CaseMedtronic Has to Withdraw CoreValve in Germany After Losing Patent Case

While in the U.S., Medtronic is waiting to finish clinical trials and get regulatory approval for the CoreValve transcatheter aortic valve system, in Germany, the medical device maker is being forced to pull the product off the market.

The Minnesota company announced Friday that a German court has ruled that Medtronic has infringed on a patent owned by California device maker Edwards Lifesciences. The ruling's effect is immediate and Medtronic must immediately withdraw the product in Germany.

In a news release, the company said it "respectfully disagrees" with the court's opinion and will appeal. It noted that the financial impact of lost sales from the product would be immaterial to its revenue outlook for the rest of the fiscal year.

The news of Medtronic's loss is surprising given that less than a month ago, another German court ruled in its favor deciding that Edward's patent had not been infringed upon, according to Glenn Novarro, senior research analyst at RBC Capital Markets. 

In a research note published Friday, Novarro estimates that Medtronic will be able to manage any potential impact to earnings per share (likely to be in the range of 1 cent to 2 cents) by cost cutting.

Edwards, on the other hand, will clearly enjoy an upside in the German market in the transcatheter market. Novarro estimates Edwards could garner  about $100 million gain in 2014 that would add an additional 20 to 25 cents to its earnings per share.

His counterpart at Leerink Swann - Danielle Antalffy - also published a note Friday where she stated that Germany is the largest transcatheter aortic valve replacement in the European market estimated at about $200 million per year. 

[Photo Credit: iStockPhoto.com user zimmytws]

-- By Arundhati Parmar, Senior Editor, MD+DI