It seems that the flow of good news for medical devices major,
Medtronic ( MDT ), remains
uninterrupted. Recently, as per news by Bloomberg, the company won
a patent infringement case over its peer Edwards
LifeSciences ( EW ). As per the German
District Court of Mannheim, Medtronic's aortic valve does not
violate Edwards' Cribier patent.
A court spokesperson, over a telephonic interview, stated that
Edwards' Cribier patent does not cover Medtronic's CoreValve
device. At present, there are two more pending cases related to
different patents between these two stalwarts in Germany. The
verdict on these ongoing cases is likely to be out by late 2013 or
In Aug 2012, Edwards filed a lawsuit against Medtronic in the
German District Court of Mannheim claiming that Medtronic's
CoreValve and Evolut valves infringe two of Edwards' transcatheter
valve patents. These patents were issued by the European Patent
Office and were validated as national patents in various European
countries, including Germany.
In Apr 2013, Edwards included a third transcatheter valve patent
to the lawsuit. An infringement hearing was held in Apr 2013 for
one of the original patents, and the hearing for the second patent
was held in May 2013.
CoreValve: Current Scenario
The CoreValve transcatheter aortic heart valvescontribute a
major part of Medtronic's structural heart business. In the fourth
quarter of fiscal 2013, the company reported $310 million of
structural heart revenues, up 8% year over year, including
mid-teens growth in transcatheter valves.
In May, the company also received the pivotal CE mark for
valve-in-valve (VIV) procedures using the CoreValve and CoreValve
Evolut(TM) transcatheter aortic valve implantation (TAVI) systems
in degenerated bioprosthetic surgical aortic valves.
The company expects the international transcatheter valve market
to grow approximately 10%, and believes that the CoreValve and
CoreValve Evolut devices shall maintain leading market share in the
international transfemoral market.
Following the robust fourth-quarter 2013 results, the German
court ruling in its favor has definitely come as a major win for
Medtronic. The company had lost one of the CoreValve related
litigation to Edwards in the last quarter (in the US District Court
for the District of Delaware).
According to Bloomberg, the company generates $75 million or
earnings of 5 cents a share from CoreValve sales in Germany.
Therefore, a verdict against Medtronic would have been favorable to
Edwards' revenues by boosting its annual earnings by 20-30 cents a
However, persistent headwinds like the weak economic conditions,
tough competition, segment pressure and currency fluctuations keep
us on the sidelines. Medtronic currently carries a Zacks Rank #3
(Hold). Other medical sector stocks that warrant a look are
Haemonetics Inc. ( HAE ) and
Myriad Genetics Inc. ( MYGN ). All these
stocks carry a Zacks Rank #1 (Strong Buy).EDWARDS LIFESCI (EW): Free Stock Analysis
ReportHAEMONETICS CP (HAE): Free Stock Analysis
ReportMEDTRONIC (MDT): Free Stock Analysis ReportMYRIAD GENETICS (MYGN): Free Stock Analysis
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