Analyst: German court 60% likely to halt Medtronic's CoreValve sales

Expect Edwards Lifesciences' ($EW) aggressive and increasingly hardcore heart valve patent battle with Medtronic ($MDT) to get worse in the coming weeks. An industry analyst predicts a German court will issue an injunction preventing Medtronic from selling its CoreValve transcatheter aortic valve replacement (TAVR) in that country. And continued legal action is advancing in the U.S.

Canaccord Genuity analysts Jason Mills and Jeffrey Chu make the prediction in a June 9, 2013, daily letter, suggesting  there is a 60% chance Edwards' 2012 patent suit in the German District Court of Mannheim will successfully obtain an injunction preventing Medtronic from selling CoreValve, and that such a decision is "imminent." Additionally, the analysts note, Edwards filed a motion earlier this spring in the U.S. District Court to permanently prevent Medtronic from selling CoreValve in the domestic TAVR market, and a trial date is pending.

As the analysts explain, Germany is Europe's largest market for transcatheter aortic valve implantation, or TAVI. And so the pending German legal decision--if it prevents CoreValve's sale in the country--would be a profound victory for Edwards and its Sapien valve and a major defeat for Medtronic. Last November, the U.S. Court of Appeals for the Federal Circuit ruled in Edwards' favor, backing a 2010 lower-court jury verdict determining that CoreValve violated its TAVR patent. Over the winter, Medtronic quietly paid $83.6 million to settle the jury verdict.

But Medtronic at that time said it would continue CoreValve clinical studies and keep selling the device in the European Union. With that plan now in jeopardy, Edwards is continuing its patent battle against the product in the U.S. CoreValve doesn't yet have FDA approval, but it may not get the chance. Edwards' goal with its latest U.S. patent trial could keep it from ever reaching patients here, at least for the TAVR indication.

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