C.R. Bard (NYSE:BCR) this week won a preliminary injunction barring U.S. sales of CryoLife‘s (NYSE:CRY) PerClot Topical hemostasis agent in a patent infringement lawsuit in Delaware.
Atlanta-based CryoLife last year asked Judge Susan Robinson of the U.S. District Court for Delaware to rule that the PerClot product does not infringe a patent for Bard subsidiary Medafor’s Arista. Medafor filed a counter-claim for infringement and asked Robinson for the preliminary injunction.
The judge obliged March 10, according to court documents, ruling that Medafor showed that the PerClot product likely infringes its Arista patent.
"There is sufficient record evidence that Cryolife’s PerClot product is in direct competition with Medafor’s Arista product and that these products are targeted to the same customers and hospitals. Medafor has made persuasive arguments for the loss of its customer base and damage to its goodwill. For these reasons, the balance of the hardships and the public interest weigh in Medafor’s favor," Robinson wrote.
CryoLife’s 2015 guidance predicted $1.5 million in PerClot Topical sales, according to a press release, and the company set aside $3 million to $4 million to cover the legal tilt with Bard.
"While we are disappointed with the district court’s ruling on the preliminary injunction motion, we continue to believe we have a strong case and remain focused on securing the best long-term outcome in the litigation for our shareholders. We remain on track to begin enrollment in our PerClot IDE clinical trial for surgical applications during the 1st half of 2015, which would position us for potential FDA approval in the 2nd half of 2017," president & CEO Pat Mackin said in prepared remarks.
Bard in 2013 paid $200 million up front and put another $80 million in potential milestones on the table for Medafor. Interestingly, when the deal closed CryoLife cashed in on its $2.6 million investment in its rival, reaping $8.4 million in profits for its stake in Medafor.