Medtronic (NYSE:MDT) headed straight to the Federal Circuit Court of Appeals this week after a lower court ruled in favor of arch-rival Edwards Lifesciences (NYSE:EW), banning U.S. sales of Medtronic’s CoreValve transcatheter aortic valve implantation system.
The Federal District Court of Delaware ruled on Friday that the CoreValve device infringes on Edwards’ patents, and the judge issued an order banning Medtronic from selling or offering to sell the CoreValve system in the U.S. At Medtronic’s request, the judge stayed the order for 7 business days to give the company time to "seek prompt relief" from a higher court.
It’s a harsh blow for Medtronic, which just earlier this year won FDA approval for CoreValve. MDT shares lost 5.2% over the weekend but gained some of that back, down just 1.6% today compared with Friday’s close. Shares were going for $58.23 apiece as of about 12:40 p.m. EST today.
EW shares shot up 12.3% over the weekend and continued to climb throughout the morning, trading at $82.59 by early afternoon. The stock was up 13.2% as of about 12:45 p.m. EST.
"Medtronic is appealing the Court’s injunction, and intends to ask the Federal Circuit Court of Appeals to prevent it from going into effect until it determines if the injunction was properly issued," according to a statement sent to MassDevice.com.
Medtronic also took the opportunity to distinguish its from Edwards’ respective technologies.
"The Court stated that CoreValve is a ‘safer device, and that patients in whom it is implanted have better outcomes with a lower risk of death,’" Medtronic wrote. "The Court also found that the public interest favors enforcement of patent rights."
Friday’s court ruling doesn’t affect U.S. clinical trials and has no effect on CoreValve sales overseas, Medtronic noted. The judge also ordered Medtronic and Edwards to meet and hash out details of how physicians and facilities already trained in CoreValve implantation may continue using the system free from the limitations of the injunction.
The decision was years in the making, stemming back to a 2010 federal jury ruling that Medtronic willfully infringed on Edwards’ patents for its Sapien TAVI system. The U.S. Court of Appeals affirmed that decision in 2012 and the Supreme Court last year refused Medtronic’s request for a hearing.
The U.S. battle came to a head earlier this year when the FDA approved the CoreValve system for sale in the U.S. Edwards chairman & CEO Michael Mussallem said shortly before the FDA decision that the company intends to fight for its territory in the U.S.
The companies have been at war over TAVI technology for years, and Medtronic appears to be in the lead overseas. The European Patent Office in October 2013 issued a preliminary, non-binding ruling that Edwards’ patent was invalid. Medtronic lauded the decision, which allowed CoreValve back on the German market after a temporary ban.