A Dutch appeals court handed a $782,000 loss to already-embattled Spectranetics Corp. (NSDQ:SPNC) last week in a long-running dispute with an Italian distributor, the Colorado Springs-based company said.
Spectranetics was sued in 1999 by Cardiomedica SpA "over the existence of a distribution agreement between Cardiomedica and Spectranetics," according to a regulatory filing. By 2004, the case had made its way to the Court of Appeal of Amsterdam, which ruled that the Italian device distributor was entitled to compensation for its loss of profits for a three-year span when the contract was deemed in effect. In 2009 Spectranetics ponied up $600,000 after that court ordered it to pay lost profits, interest and legal costs.
Cardiomedica appealed that ruling in September 2009, asking for additional damages of about $1.9 million (€1.4 million). Now the Dutch court has ruled that Spectranetics owes another $782,000 (about €573,000), according to a filing with the federal Securities & Exchange Commission.
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"This amount will be recorded as a charge in our financial statements for the quarter ending September 30, 2011,"according to the filing. "The company is currently evaluating whether it will appeal this ruling and has until December 6, 2011, to file an appeal."
Spectranetics, which makes cardiac ablation lasers, is no stranger to the courtroom. Last year it admitted responsibility and agreed to pay $5 million to avoid federal prosecution in a case alleging that it illegally imported medical lasers for a clinical trial. Federal prosecutors also leveled criminal charges against the company’s former CEO, two senior executives and a consultant in connection with the case. (In July Spectranetics named Scott Drake as its new CEO.)
The company has had better luck in civil court here in the U.S. In June, a federal appeals court upheld a lower court’s $22 million verdict against Cordis Corp., the stent-making arm of Johnson & Johnson (NYSE:JNJ), in a patent infringement case brought by Spectranetics – and the case back down for consideration of further damages.
Spectranetics posted record second-quarter sales of $32 million during the three months ended June 30, a 7 percent improvement over the $30 million it posted during the same period last year. Profits soared more than five-fold, to $584,000 or 2 cents per diluted share, compared to $91,000 ($0 diluted EPS) during Q2 2010.
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