- Boston Scientific and Edwards Lifesciences jointly announced Tuesday both parties have reached a settlement covering all outstanding patent disputes between the two companies, ending a series of international lawsuits and patent office rulings that made headlines in 2018.
- The announcement states all pending cases and appeals worldwide will be dismissed. The companies also agreed not to litigate additional patent disputes related to their current lineups of transcatheter aortic valves (TAVR), certain mitral valve repair devices and left atrial appendage closure devices, and said that any injunctions currently in place will be lifted.
- Edwards will make a one-time payment of $180 million to Boston and no further royalties will be owed by either party under the agreement, according to the companies.
The settlement comes after a less-cordial pair of announcements from the structural heart rivals in December when a U.S. District Court for Delaware ruled Edwards Lifesciences' Sapien 3 device infringed a TAVR patent held by Boston Scientific.
Edwards responded to the Delaware ruling saying it would not pay the initial court-ordered $35 million in infringement damages, an amount which the court said would likely increase in post-trial motions. Edwards also said it would appeal the court's decision that Boston's Lotus aortic valve system did not infringe any Edwards patents. The company sought to back up its case by citing a March 2018 U.S. Patent and Trademark Office review that found Boston's infringement claims against Edwards invalid.
The TAVR market in particular is a critical business segment for both companies. Cardiovascular is Boston Scientific's top-performing division. Likewise, Edwards projected last month its 2019 TAVR sales will reach between $2.4 billion and $2.7 billion, representing underlying growth of 11% to 15%. The company received FDA clearance of its Sapien 3 Ultra system at the end of 2018, which features a redesigned valve and delivery system.
Jefferies analyst Raj Denhoy called the settlement "a good outcome" for both companies, considering that the disputes had "mushroomed" with "no logical end in sight."
"Both companies [had] said they would rather compete in the marketplace than in the courtroom," Denhoy said.
In early morning trading Tuesday, Boston Scientific stock was up more than 3% and Edwards Lifesciences was up around 7%.