A New York State Supreme Court judge dealt a blow to Biotronik AG’s case against Johnson & Johnson (NYSE:JNJ) subsidiary Conor Medsystems over their defunct deal to distribute a drug-eluting stent.
The German medical device giant had accused Conor of issuing a sham recall of its drug-eluting CoStar coronary stent and spiking a distribution deal that cost Biotronik $100 million.
The suit alleges that Conor reneged on a supply contract for the CoStar stent, which Conor recalled in 2007 after it fared badly in a clinical comparison with Boston Scientific’s (NYSE:BSX) Taxus DES. But the recall was a sham aimed at eliminating a competitor to J&J’s Cordis Cypher stent in Europe, according to court documents (Johnson & Johnson bought Conor just before the CoStar recall).
Conor moved to have the case dismissed, arguing that the terms of the spiked distribution deal bar Biotronik’s claims to lost profits. Justice Bernard Fried denied that motion, but also ruled that the German firm can’t recover the $100 million it claims it lost – the only damages it was seeking in the suit.
Fried left the door open, however, for Biotronik to amend its claims.
"Biotronik may still pursue a claim for nominal damages and any other damages it is entitled by law or agreement resulting from the claimed breaches of the distribution agreement," Fried wrote, according to court documents.
Earlier this year, J&J announced its plans to exit the coronary stent business by the end of 2011.