Medtronic To Pay Abbott $400 Million To Settle Stent Suits

Medtronic Inc. (MDT) will pay rival Abbott Laboratories (ABT) $400 million as part of a legal settlement on stents and stent-delivery systems.

It also will pay $42 million to device company Evysio, whose stent patents Medtronic has licensed.

Medtronic expects to report a fiscal first-quarter charge related to the settlement, which prevents the companies from suing each other in the coronary stent and stent-delivery systems fields for at least 10 years.

Medtronic said it has now resolved or settled substantially all intellectual property litigation affecting the design and delivery systems for its bare metal and drug-eluting stent franchise. It said it will now focus more on efforts to improve health care for patients with vascular disease.

Medtronic's Endeavor drug-coated stent, launched in the U.S. a year ago, is failing to gain ground on the increasingly tough competition amid questions about whether its heart-device industry can grow.

Endeavor started strong, grabbing about one-fifth of the roughly $2 billion domestic market shortly after winning U.S. Food and Drug Administration approval. But it was knocked back when a new product made by Abbott Labs and sold jointly with Boston Scientific Corp. (BSX) launched in the summer. Recent analyst estimates suggest Endeavor market share has shrunken to 10%.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; [e-mail]