NxStage Medical (NSDQ:NXTM) and Gambro Renal buried the hatchet last week, settling a lawsuit accusing NxStage of false advertising and renewing their supply deal.
Gambro sued NxStage in February 2012, accusing the Lawrence, Mass.-based renal device company of making misleading statements comparing its System One hemodialysis system with Gambro’s competing Prisma and Prismaflex devices, according to court documents.
"NxStage has systematically and as part of its overall marketing plan falsely described or misrepresented or made misleading descriptions or representations about the nature, characteristics, and qualities of its System One device, of Gambro’s Prisma and Prismaflex devices, and of System One as compared to Prisma or Prismaflex," according to the documents. "NxStage’s false advertising and promotions have caused Gambro to lose sales and customers, including without limitation Massachusetts General Hospital, Brigham & Women’s Hospital, Baystate Medical Center, Boston Medical Center, University of Massachusetts Memorial Medical Center, the Lahey Clinic, Thomas Jefferson University Hospital, the Johns Hopkins Hospital, UCLA Medical Center, and Hermann Memorial Medical Center."
Gambro, acquired by Baxter (NYSE:BAX) for $3.9 billion last September, sought compensatory damages, disgorgement and recovery of profits from the sale of System One devices, triple damages, interest and legal costs. The Swedish medtech maker also wanted injunctions barring any NxStage employee from mentioning Gambro products in their marketing materials or discussions and asked the court to order NxStage to retract any alleged false statements about the Gambro devices, court records show.
But the companies agreed to settle the case, effective Jan. 2, "without any admission of wrongdoing or liability by either party and dismissal of all related claims with prejudice," according to a regulatory filing.
NxStage and Gambro also agreed to extend a supply deal for NxStage tubing sets granting Gambro the exclusive right to distribute the sets to DaVita Inc.’s dialysis clinics. Originally set to expire at the end of June 2014, the deal is now set to run until the end of next year "with annual renewals thereafter unless terminated by either party with 6 months’ prior notice," according to the filing.
