Medtronic Inc. (MDT)’s aortic valve, inserted into the heart via a catheter, doesn’t violate Edwards Lifesciences Inc.’s Cribier patent, the German District Court of Mannheim ruled.
The Cribier patent invoked doesn’t cover the Medtronic CoreValve device targeted in the case, said Stefanie Voelker, a court spokeswoman, in a telephone interview. There are two more challenges pending in Germany covering different patents that will be resolved later this year or in early 2014.
Medtronic generates about $75 million, or 5 cents in earnings per share, from CoreValve’s sales in Germany, said Danielle Antalffy, an analyst with Leerink Swann in New York. It would have been a “significant windfall” for Irvine, California-based Edwards if the ruling had gone the other way, with an injunction against Medtronic, that could have added 25 cents to 30 cents a share to Edwards (EW)’ annual earnings.
“We view today’s news as a minor negative for Edwards, as we believe some investors had started to factor in a potential infringement decision and injunction against Medtronic,” Antalffy wrote in a note to clients today. “In Germany, where patent law is different than in the U.S., a ruling of patent infringement results in an immediate injunction, which would result in removal of Medtronic’s CoreValve from the German market.”
Edwards declined 2.4 percent to $70.22 at 12:23 p.m. New York time. The shares had fallen 21 percent in the 12 months through yesterday. Medtronic, based in Minneapolis, rose less than 1 percent to $52.85.
Edwards is unlikely to win either of the remaining patent decisions, said Larry Biegelsen, an analyst with Well Fargo in New York. While Edwards was able to protect its Andersen patents in the U.S., it wasn’t successful in Germany, he wrote in a note to investors today.
“Therefore, we think there is no guarantee Edwards will prevail” in either of the ongoing cases in Germany, he wrote.
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