Medtronic pays $400 million to settle stent lawsuit

<p>Medtronic Inc. said Monday it agreed to pay Abbott Laboratories $400 million to settle lawsuits related to the design of its artery-opening stents, ending a series of patent fights that have embroiled its Santa Rosa vascular unit for more than a decade.</p><p>Medtronic and Abbott agreed not to sue each other for at least 10 years over matters related to stents, some of the most lucrative medical devices marketed by either company.</p><p>The settlement closes the book on a series of patent battles between Medtronic and its rivals over stents, which are tiny mesh metal tubes used to prop open arteries that have been cleared of fatty plaque.</p><p>In May, Medtronic announced it paid $270 million to Johnson & Johnson to settle royalty disputes over stent patents. In January, it settled several cases with Boston Scientific Corp. for undisclosed terms.</p><p>“Now that we’ve settled with Abbott, it concludes the settlements with our three main competitors in the vascular stent and stent delivery systems,” said Joe McGrath, spokesman for Medtronic’s Santa Rosa facility.</p><p>The settlements will have no short-term impact on sales or employment at its Santa Rosa unit, which employs 840 people, McGrath said. But they will allow Medtronic to use technology developed by its three main competitors, McGrath said.</p><p>“It’s good news for the operations in Santa Rosa because it gives us freedom to operate on a level playing field,” McGrath said. “It frees us up to focus our resources on innovating medical technology.”</p><p>Medtronic said it will take an unspecified charge in its fiscal first quarter. Medtronic will also make a $42 million “success payment" to privately held evYsio Medical Devices, as part of a sublicense to Abbott of evYsio’s stent design.</p><p>Minneapolis-based Medtronic said the agreement settles all outstanding coronary stent litigation between the companies. Abbott said the litigation between the companies dates to 1998 and involves lawsuits in the U.S. and Europe, all of which are now settled. It said the patents related to the design of stents, their manufacture and use, and the systems that help physicians insert them into the body of a patient.</p><p>Abbott, of North Chicago, said it will record a one-time gain in the third quarter from the settlement.</p><p>Both Medtronic and Abbott market drug-coated stents, which leak drugs to prevent arteries from reclogging regrowth. The stents quickly became the fastest-selling medical devices in recent history after their introduction in 2003.</p><p>However, questions about the devices’ safety compared with bare-metal stents slowed growth beginning in 2006. Medtronic’s Endeavor and Abbott’s Xience stents entered the market in 2008, competing against older offerings from Boston Scientific and Johnson & Johnson.</p><p>Natick, Mass.-based Boston Scientific reported last week that it currently holds half the U.S. market for drug-coated stents.</p><p>Staff Writer Nathan Halverson and the Associated Press contributed to this report.</p>