NuVasive Announces Court Ruling Regarding Ongoing Royalties

NuVasive Announces Court Ruling Regarding Ongoing Royalties 
SAN DIEGO, CA -- (Marketwired) -- 06/12/13 --   NuVasive, Inc.
(NASDAQ: NUVA) a medical device company focused on developing
minimally disruptive surgical products and procedures for the spine,
announced today that it received a ruling from the U.S. District
Court in regards to ongoing royalty rates for Phase I of its patent
litigation with Medtronic. As previously announced, Phase 2
surrounding the cervical plates involved in the dispute was settled. 
As part of the verdict in Phase I of the litigation, royalty rates
were determined by the jury as follows: 10% on certain of NuVasive's
CoRoent XL implants and 3% on certain MaXcess retractors and related
products. Before the appeal in Phase I could move forward, the
District Court was required to determine the ongoing royalty rates
applicable to these products during the period of time following the
verdict.  
Medtronic requested ongoing royalty rates of 36% on the applicable
NuVasive CoRoent XL implants and 11% on the applicable MaXcess
retractors and related products. However, in the ruling received
today, the District Court ordered royalty rates of 13.75% on the
applicable CoRoent XL implants and 8.25% on the applicable MaXcess
retractors. 
Since September 2011, NuVasive has been accruing an estimated
litigation royalty expense based on the royalty rates used in the
jury's original calculation of lost profits and monetary damages.
Prior to the post-verdict rates issued by the Court today, the
Company had expected litigation royalty expense of approximately $11
million for the full year 2013. The new royalty rates determined
today will increase that expected litigation royalty expense for 2013
by approximately $5 million. In addition, in the current quarter, the
Company will record an approximate $6.5 million charge to account for
the historical difference between the post-verdict royalty rates
determined today and the rates that were being used to calculate the
litigation royalty expense accruals since September 2011. The vast
majority of the litigation royalty expense accruals will end in
February 2015 as certain Medtronic patents expire. As the verdict is
being appealed, the Company will accrue to the higher rates
determined today and will begin to escrow funds on a go-forward
basis.  
Alex Lukianov, Chairman and Chief Executive Officer, said, "We are
pleased to have an outcome regarding the ongoing royalty issue in our
dispute with Medtronic so we can finally begin the appellate process.
While we disagree with the Court-ordered royalty rates, they are
significantly lower than those sought by Medtronic after its motion
for an injunction following the verdict was denied. Today's ruling
will have an immaterial impact on our liquidity and our ability to
fund strategic initiatives. With this issue resolved, we will
promptly and aggressively appeal the verdict and damage award to the
Court of Appeals for the Federal Circuit. We intend to vigorously
defend the investments we have made to pioneer the lateral approach
to spine fusion surgery and to become the most innovative spine
technology company in the world." 
About NuVasive 
NuVasive is an innovative global medical device company that is
changing spine surgery with minimally disruptive surgical products
and procedurally integrated solutions for the spine. The Company is
the 4th largest player in the $8.2 billion global spine market. 
NuVasive offers a comprehensive spine portfolio of over 80 unique
products developed to improve spine surgery and patient outcomes. The
Company's principal procedural solution is its Maximum Access
Surgery, or MAS(R) platform for lateral spine fusion. MAS provides
safe, reproducible, and clinically proven outcomes, and is a highly
differentiated solution with fully integrated neuromonitoring,
customizable exposure, and a broad offering of application-specific
implants and fixation devices designed to address a variety of
pathologies.  
Having pioneered the lateral approach to spine fusion, NuVasive
continues to be at the forefront of the spine industry's shift toward
less invasive solutions. The Company places a large focus on clinical
research and support of the Society of Lateral Access Surgery, or
SOLAS(R), to expand the body of clinical evidence in support of
NuVasive's minimally disruptive solutions and to drive adoption of
its techniques. The Company's dedication to innovation continues to
spawn game changing technology such as the PCM(R) motion preserving
disc for the cervical spine, XLIF(R) Corpectomy for tumor and trauma,
and Armada(R), which treats adult degenerative scoliosis in a less
invasive fashion. The Company has also developed procedural solutions
that completely redefine and improve upon traditional procedures like
TLIF, PLIF, Posterior Fixation, and ALIF. NuVasive's solutions are
increasingly being adopted internationally, as the Company lays the
groundwork to continue growing as a global business and to offer
industry-leading, Absolutely Responsive customer service to surgeons
world-wide. NuVasive is focused on becoming a $1 Billion
Start-Up(TM); taking market share by maintaining a commitment to
Superior Clinical Outcomes, Speed of Innovation(R), and Absolute
Responsiveness(R).  
NuVasive cautions you that statements included in this press release
that are not a description of historical facts are forward-looking
statements that involve risks, uncertainties, assumptions and other
factors which, if they do not materialize or prove correct, could
cause NuVasive's results to differ materially from historical results
or those expressed or implied by such forward-looking statements. The
potential risks and uncertainties that could cause actual growth and
results to differ materially include, but are not limited to: the
risk that NuVasive's revenue or earnings projections may turn out to
be inaccurate because of the preliminary nature of the forecasts; the
risk of further adjustment, or unanticipated difficulty in selling
products or generating expected profitability; and other risks and
uncertainties more fully described in NuVasive's press releases and
periodic filings with the Securities and Exchange Commission.
NuVasive's public filings with the Securities and Exchange Commission
are available at www.sec.gov. NuVasive assumes no obligation to
update any forward-looking statement to reflect events or
circumstances arising after the date on which it was made.  
Investor Contact:
Tina Jacobsen, CFA
NuVasive, Inc.
858-320-5215
investorrelations@nuvasive.com 
Media Contact: 
Nicole Collins
NuVasive, Inc.
858-909-1907
media@nuvasive.com 
 
 
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