Edwards Lifesciences' ($EW) CardiAQ Valve Technologies scored a victory in a courtroom battle with a rival and former service provider that allegedly stole the company's trade secrets to develop its transcatheter mitral valves.
A federal jury in Boston found that Neovasc ($NVCN) breached a nondisclosure agreement with CardiAQ and that it intentionally deceived the company about its plans to create similar devices. The jury also ordered Neovasc to pay $70 million in damages for misappropriating trade secrets, Edwards said in a statement.
The courtroom drama dates back to 2014, when CardiAQ filed suit against Neovasc. In 2009, CardiAQ hired Neovasc to help develop its transcatheter mitral valve replacement (TMVR) program.
During that time, Neovasc started working on its own TMVR program but did not tell CardiAQ. CardiAQ found out that Neovasc filed a patent for its technology in late 2011, which prompted it to sue the company a few years later.
The legal battle isn't over yet. A judge will now decide whether CardiAQ co-founders Dr. Arshad Quadri and J. Brent Ratz should be added as inventors to Neovasc's TMVR patent.
If Quadri and Ratz's names are added to the patent, Neovasc will probably have to work up a license agreement with Edwards/CardiAQ to commercialize the device, Leerink analyst Danielle Antalffy wrote in a note to investors. This could result in Neovasc paying 25% royalties to CardiAQ, Antalffy said.
|Neovasc CEO Alexei Marko|
In the meantime, Neovasc will "likely appeal the decision entirely, which will push the process out at least another few months," Antalffy said. An appeal would also give the company time to shore up its cash reserves to pay damages, she added.
Unsurprisingly, Neovasc is not pleased with the latest turn of events. The jury phase of the suit "was not resolved to our satisfaction," CEO Alexei Marko said in a statement. "We will be exploring our options regarding post-trial motions in the trial court and, potentially, the appellate process."
The victory marks a bright point for Edwards, which snatched up CardiAQ last July for $350 million in cash. The deal was meant to boost Edwards' position in the transcatheter mitral valve replacement market and complement its efforts in the field.