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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Nuvasive Inc | NASDAQ:NUVA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 39.75 | 36.36 | 42.00 | 0 | 01:00:00 |
By Saabira Chaudhuri
NuVasive Inc. (NUVA) will raise its estimated litigation royalty expense for the year and also record a charge in the current quarter following a U.S. District Court ruling that set ongoing royalty rates to be paid to Medtronic Inc. (MDT), although these are lower than Medtronic had requested.
"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," NuVasive Chief Executive Alex Lukianov said in a statement. "Today's ruling will have an immaterial impact on our liquidity and our ability to fund strategic initiatives."
The court ruling is for Phase I of NuVasive's patent litigation with Medtronic Inc. (MDT). Phase 2 surrounding the cervical plates involved in the dispute was settled.
NuVasive, a medical device company focused on developing surgical products and procedures for the spine, said Medtronic had requested ongoing royalty rates of 36% on NuVasive's CoRoent XL implants and 11% on the company's MaXcess retractors and related products.
However in the ruling, the District Court ordered royalty rates of 13.75% on the CoRoent XL implants and 8.25% on the MaXcess retractors.
A representative of Medtronic didn't immediately respond to a request for comment.
NuVasive said since September 2011 it 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. The jury had set royalty rates of 10% on CoRoent XL implants and 3% on the MaXcess retractors and related products.
Before the court's verdict, NuVasive had expected litigation royalty expense of about $11 million for 2013. Wednesday, it said the new royalty rates will increase this expense by roughly $5 million.
In addition, in the current quarter, the company will record a roughly $6.5 million charge to account for the historical difference between the post-verdict royalty rates determined and the rates that were being used to calculate the litigation royalty expense accruals since September 2011.
NuVasive also said it will "aggressively appeal" the verdict and damage award to the Court of Appeals for the Federal Circuit.
Shares of NuVasive closed at $22.09 and Medtronic closed at $52.07 on Tuesday.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
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