Metronic Settles Patent Dispute With Edwards, Earnings Drop

Medtronic Inc. (MDT) on Tuesday said it had settled a long-running patent dispute with Edwards Lifesciences Corp. (EW).

The company also 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 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.

Also on Tuesday, Metronic 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 period.

Revenue improved 2.4% to $4.57 billion. Excluding currency fluctuations, revenue rose 3%.

Analysts polled by Thomson Reuters expected profit of $1.12 a share and revenue of $4.58 billion.

The company earlier this month said it would post a charge of $120 million-$140 million to resolve a product liability lawsuit relating to its Infuse bone graft.

Medtronic on Tuesday also said it expected full-year revenue growth of 3% to 5% on a constant-currency basis, with per-share earnings of $4 to $4.10. Analysts polled by Thomson Reuters had been expecting revenue growth of 4% and per-share earnings of $4.09.

Write to Michael Calia at [e-mail]

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