By Michael Calia
Medtronic Inc. on Tuesday said it had settled a long-running
patent dispute with Edwards Lifesciences Corp., and it reported a
big drop in fiscal fourth-quarter earnings because of charges for
the settlement of lawsuits.
Medtronic said it would pay Edwards $750 million and royalty
payments of no less than $40 million a year through April 2022 over
sales of its CoreValve, an artificial aortic heart valve.
The settlement comes weeks after a federal appeals court delayed
an injunction against sales of CoreValve, dragging out a dispute
that had lasted several years. In 2010, a jury found that CoreValve
infringed upon an Edwards patent.
The companies dismissed all pending litigation, and neither
admitted their products infringe any of the other company's
patents. They also agreed not to litigate patent disputes with each
other over transcatheter valves during the eight-year duration of
the agreement.
Also on Tuesday, Medtronic posted a profit of $448 million, or
44 cents a share, for the fiscal fourth quarter ended April 25,
down from $969 million, or 95 cents a share, a year earlier.
Excluding a charge related to the Edwards settlement as well as a
charge related to a product liability lawsuit, per-share earnings
were $1.12, up from $1.10 in the prior-year reporting period.
Revenue improved 2.4% to $4.57 billion. Excluding currency
fluctuations, revenue rose 3%.
Analysts polled by Thomson Reuters had expected fourth-quarter
profit of $1.12 a share and revenue of $4.58 billion.
The company earlier this month had said it would post a charge
of $120 million-$140 million to resolve a product-liability lawsuit
related to its Infuse bone graft.
Medtronic on Tuesday also said it expected revenue growth of
3%-5% on a constant-currency basis, with per-share earnings of
$4.00-$4.10, for the new fiscal year. Analysts polled by Thomson
Reuters had been projecting revenue growth of 4% and per-share
earnings of $4.09.
Write to Michael Calia at michael.calia@wsj.com
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