CryoLife (NYSE:CRY) said today that is agreed to settle a patent infringement battle with C.R. Bard (NYSE:BCR) subsidiary Medafor over CryoLife’s PerClot hemostasis agent.
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 Medafor’s competing Arista product. Medafor filed a counter-claim for infringement and asked Robinson for the preliminary injunction, which the judge granted in March.
Today CryoLife said the settlement, which Robinson must still approve, leaves the injunction in place until the Medafor patent expires early in February 2019. Each side is due to cover its own legal costs, the company said. CryoLife sought to downplay the settlement’s impact, saying it doesn’t expect to have PerClot ready and approved for the U.S. market until “just months” before the Medafor patent’s lapse.
“We are pleased to resolve the litigation with Medafor and believe it is a positive development for our company. It removes an ongoing legal dispute that we estimate could have taken well over 2 years and millions of dollars to resolve, with an uncertain outcome,” chairman, president & CEO Pat Mackin said in prepared remarks. “In the near term, we anticipate a positive benefit to 2016 expenses from the resolution with Medafor due to the elimination of legal fees related to the litigation and the slower-than-expected pace of patient enrollment in the PerClot IDE. The resolution will also allow us to place more focus on our strategic business development initiatives, which we believe present a significant opportunity to enhance our growth trajectory and leverage our well-established relationships in cardiac and vascular surgery. Longer-term, we remain confident in PerClot’s competitive positioning and believe it has the potential to capture significant market share in the U.S. once available.”
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.
CryoLife’s 2015 guidance predicted $1.5 million in PerClot Topical sales, according to a press release, and the company had aside $3 million to $4 million to cover the legal tilt with Bard.
