Edwards Lifesciences Corp. demonstrated the adage of “what goes up must come down” this month.
The Irvine-based maker of heart valves and other cardiovascular devices had a patent win against Minneapolis-based rival Medtronic Inc. upheld by a jury in the U.S. District Court for the District of Delaware about two weeks ago. The jury awarded Edwards $394 million in the case.
The patent in question is part of the Cribier family of patents, named after cardiologist and inventor Dr. Alain Cribier. It expires at the end of 2017.
Edwards intends “to continue to defend this intellectual property when it is used by others without permission,” said Larry Wood, the company’s corporate vice president, transcatheter heart valves, in a statement.
Medtronic said it would appeal the jury’s decision.
Medtronic got CoreValve in 2009 after spending $700 million for Irvine-based CoreValve Inc.
Edwards and Medtronic have been engaged in patent fights for some years.
A federal jury in 2010 found Medtronic willfully infringed on Edwards’ U.S. Andersen transcatheter heart valve patent and awarded damages.
The verdict was upheld on appeal, and Medtronic paid Edwards $84 million last year.
Edwards’ shares closed up 2% on Jan. 15 after that news came out. The tide changed two days later when the device maker’s shares slipped after the Food and Drug Administration granted an earlier-than-expected approval of Medtronic CoreValve. Its shares closed down 6% to a market value of about $7.5 billion on Jan. 17.
Regulators had set an April 1 deadline to approve CoreValve for domestic use. The device, like Edwards Sapien, is used to treat patients with severe aortic stenosis who are too fragile for open-heart surgery.
The two companies’ valves share the European market.
The FDA said earlier that it could approve CoreValve without a review from outside advisers, which is a traditional step in medical device regulatory approvals.
“With approval earlier than expected, share loss for [Edwards] will likely occur sooner than expected,” Glenn Novarro, an analyst who covers Edwards and Medtronic for Toronto-based RBC Capital Markets, said in a research note.
Novarro mentioned that CoreValve’s size—it’s smaller than Edwards Sapien—should give the former a competitive advantage until the FDA approves Edwards’ smaller valve, the Edwards Sapien XT. He wrote that regulators will likely approve Sapien XT in a few months.
Separately, Edwards said it received an investigational device approval from the FDA to start a single-arm, nonrandomized clinical trial of Sapien 3, another member of its less-invasive valve roster. Sapien 3 is designed to treat intermediate-risk patients, and European regulatory approval “is anticipated in the near future,” the device maker said in a news release.
Irish Drug Company Unlikely
Irvine-based Allergan Inc. (see story, page TK) won’t be following some of its peers when it comes to dealing with corporate taxes.
Chief Executive David Pyott told Bloomberg this month that it’s unlikely he’d buy a drug company in Ireland in order to lower Allergan’s corporate tax rate.
Allergan has a plant in Galway, Ireland, and Pyott told Bloomberg that the maker of Botox and other drugs already has tax advantages because of it.
Pyott demonstrated his trademark dry wit with investors, who analysts said have been pressuring Allergan to seek an Irish deal.
“This is the latest fashion in financial engineering, until the roof comes off and someone changes the rules. I am not swayed by that,” Pyott told Bloomberg in San Francisco, where he and Allergan were participating in a healthcare conference presented by JPMorgan Chase & Co.
David Maris of BMO Capital Markets wrote in a research report that it’s “extremely likely” that Allergan, which had $2.69 billion in cash and equivalents on hand as of the end of the third quarter, would make a deal this year.
He said potential targets could include Denmark-based ALK-Abello A/S or France-based Stallergenes SA, a pair of allergy drug companies. Allergy drugs might be a target because neither company is in a crowded market.
Allergan could even go into central nervous system drugs, including those that treat addictions, Maris said.
Bits and Pieces
Irvine-based molecular diagnostics provider CombiMatrix Corp. said Dallas-based ProPath picked it to provide chromosomal microarray analysis testing for miscarriage analysis. … San Clemente-based medical device maker VertiFlex Inc. said the Centers for Medicare and Medicaid Services ruled its percutaneous image-guided lumbar decompression procedure is eligible for what’s known as “coverage with evidence development.” That allows Medicare coverage for beneficiaries who have lumbar spinal stenosis who are participating in an approved clinical study. … San Clemente-based Amada Senior Care Inc. said it’s now operating in Jackson, Miss. Amada provides nonmedical home care for seniors.
