Analyst: St. Jude Medical might have an edge on Volcano in patent spat | Wall Street Beat

St. Jude Medical (NYSE:STJ) might have a slight edge on Volcano (NSDQ:VOLC) in their contentious dispute over fractional flow reserve technology, according to an analyst at Leerink Swann.

That’s because St. Jude patents are older and more detailed than Volcano’s, wrote Leerink analyst Danielle Antalffy, making them easier to defend.

The case, which is the consolidation of 2 lawsuits filed in the U.S. District Court for Delaware, is entering the key claim construction phase, during which Judge Richard Andrews will set the parameters of each patent’s claims.

Sign up to get our free newsletters delivered straight to your inbox

The firms sued each other over the FFR technology, which measures arterial blood flow, in 2010, with St. Jude accusing Volcano of violating its IP for the PressureWire FFR device and Volcano alleging the same for its PrimeWire FFR system.

The roughly 6-week claims construction phase could prove crucial, as it’s the most likely time for a settlement, an un-named patent law expert told Antalffy. A trial is scheduled for Oct. 15.

The STJ/VOLC grudge – the companies have been wrangling for years over optical coherence tomography imaging technology – might preclude a settlement, however.

"Based on the court transcripts and documents he has reviewed, the behavior of the parties stands out to the specialist as both have adopted a scorched earth approach in the discovery phase. It appears that the parties and their lawyers don’t like each other at an intense level," Antalffy wrote. "Both St. Jude and Volcano appear to be arguing over everything possible, which tends to drag out the case and prolong timelines. If the parties were to settle, the specialist highly doubts that St. Jude would accept a straight cross-license agreement and would likely expect some royalty flow in its direction.

"If one party was found to infringe, the most likely penalty is an ongoing royalty as a % of sales, likely in the 5%-10% range, with treble damages (3x) possible if found to willfully infringe. The royalty would be a floor on damages, with the winner able to seek compensation for lost profits and possibly ill-gotten gains by the loser. We estimate that a 7.5% royalty on Volcano’s U.S. FFR sales would have a $0.05 and $0.07/share impact in 2013 and 2014, or 15% and 11% of our current estimates," she wrote.

 Siemens "buy"s back 3.1M shares in September

Siemens (NYSE:SI) said it bought back more than 3.1 million shares between Sept. 1 and Sept. 7, taking the total number of sahres repurchased since August to nearly 14.6 million shares. 
Read more

 SafeStitch co-founder, CMO forgoes salary ‘for the foreseeable future’
Dr. Charles Filipi, chief medical officer and a co-founder of SafeStitch Medical (OTC:SFES), agreed to work without pay "for the foreseeable future," according to a regulatory filing.
Read more

 Rox Medical drums up $6M for blood pressure device
Rox Medical closed a $6 million fundin round for its Rox Flow treatment for high blood pressure. The stent-like device connects a vein and artery in the leg to treat resistant hypertension.
Read more

 Fresenius raises $3M in equity round

A unit of Fresenius (NYSE:FMS), Fresenius Medical Care Palatine LLC, raised more than $3.1 million in an equity funding round from 2 unnamed investors, according to a regulatory filing.
Read more

 Analysts’ ups and downs

• Abbott (NYSE:ABT): Zacks Equity Research reaffirms "neutral" rating, $70 price target; RBC Capital reissues "outperform" rating, $72 price target.
• Amgen (NSDQ:AMGN): UBS upgrades from "neutral" to "buy" rating, sets $96 price target.
• Baxter (NYSE:BAX): TheStreet reiterates “buy” rating.
• Cooper Cos. (NYSE:COO): ThinkEquity initiates coverage with “buy” rating, $30 price target.
• Cooper Cos. (NYSE:COO): Citigroup reiterates “neutral” rating, raises price target from $85 to $92.
• Insulet (NSDQ:PODD): Northland Securities initiates coverage at “outperform” rating, $26 price target.
• Nordion (NYSE:NDZ): Paradigm Capital downgrades from “buy” to “hold” rating, reiterates $11 price target; Canaccord Genuity reiterates "buy" rating, lowers price target from $13.50 to $13.
• NxStage Medical (NSDQ:NXTM): Northland Securities initiates coverage with “outperform” rating; Canaccord Genuity reiterates "buy" rating, $22.50 price target.
• Smith & Nephew (FTSE:SN, NYSE:SNN): Citi upgrades to "buy" from "sell" rating, raises price target from £6.79 to £7.90.
• Stryker (NYSE:SYK): Cantor Fitzgerald reiterates “hold” rating, raises price target from $56 to $58; William Blair reiterates "outperform" rating.
• Sunshine Heart (ASX:SHC): Canaccord Genuity initiates coverage with “buy” rating, $11 price target
• Zimmer (NYSE:ZMH): Bernstein upgrades from "market perform" to “outperform” rating, sets $76 price target; Zacks Equity Research reissues "neutral" rating, $67 price target.