April 16 (Bloomberg) -- Mako Surgical Corp. said it will receive Stanmore Implants Worldwide Ltd.’s robotic business assets and intellectual property in a settlement of a patent dispute.
Stanmore has agreed to withdraw from robotics, while Mako will drop patent-infringement litigation in two federal courts and at the U.S. International Trade Commission in Washington, the two companies said in a joint statement today. Financial terms weren’t disclosed
The dispute centered on computerized surgical devices and software. London-based Stanmore received U.S. regulatory approval in January to market its Sculptor Robotic Guidance Arm, used for knee surgery. It competed with Mako’s RIO Robotic Arm Interactive Orthopedic system, which accounted for $41.2 million in sales last year, or 40 percent of the Fort Lauderdale, Florida-based company’s revenue, according to data compiled by Bloomberg.
Mako “essentially took a potential robotic competitor off the market -- and kept this competitor’s robotic assets/IP out of another ortho manufacturer’s hands,” Richard Newitter, an analyst with Leerink Swann in New York, said in a note to clients.
He and Matt Miksic, an analyst with Piper Jaffray Cos., both estimated the cost of the asset purchase was less than $1 million.
“The agreement eliminates the ongoing cost and distraction of litigation, while also strengthening Mako’s existing portfolio of intellectual property, particularly in the area of haptics for robotically assisted orthopedic surgery,” Miksic said in a note to clients. He has an “overweight” rating on the shares.
Newitter, who has a “market perform” rating on Mako, said it could have cost Mako as much as $6 million in legal fees in the next 12 months.
“Stanmore is pleased to have reached closure in this matter,” Stanmore Chief Executive Officer Michael Mainelli said in the statement. The closely held company makes implants for extreme orthopedic cases.
Mako rose 62 cents, or 5.9 percent, to close at $11.21 in New York trading. The stock is down 13 percent since the beginning of the year.
“This agreement both affirms and improves Mako’s intellectual property position in robotically assisted orthopedic surgery,” Mako Chief Executive Officer Maurice Ferré said in the statement. “Moreover, we are enthused about the possibility of partnering with Stanmore on potential future projects.”
The Boston case is Mako Surgical Corp. v. Stanmore Implants Worldwide, 13cv10635, U.S. District Court for the District of Massachusetts (Boston).
The California case is Mako Surgical Corp. v. Stanmore Implants Worldwide, 13cv1221, U.S. District Court for the Northern District of California.