AngioDynamics Announces Settlement of All Patent Litigation with C.R. Bard, Inc.
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Insights
From a legal standpoint, the settlement between AngioDynamics and Becton, Dickinson and Company (BD) marks the end of a resource-intensive patent litigation process. Litigation, especially in the medical technology sector, can often be a drain on a company's finances and management attention. By resolving the dispute, AngioDynamics can reallocate funds that were previously earmarked for legal expenses towards other areas of the business, such as research and development or marketing.
The licensing agreements allow both companies to continue to innovate without the threat of further legal action, which can be seen as a positive development for the industry. It's important to note that such settlements often involve careful negotiation to ensure that the terms are favorable and do not adversely affect the company's competitive position or financial health. The structured payment plan and the potential for additional payments based on sales performance are indicative of a strategic approach to financial management in the face of legal obligations.
Analyzing the financial implications, the one-time lump sum payment of $7 million, with $3 million due immediately and the remainder over the next 12 months, will impact AngioDynamics' short-term cash flow. However, spreading the cost over time, along with the six annual payments of $2.5 million through February 2029, provides a more manageable financial outlook for the company.
Investors should consider the effect of these payments on the company's balance sheet and future earnings potential. The contingent payment of $3 million, dependent on the Federal Circuit's decision, introduces an element of uncertainty. However, the settlement brings financial predictability in the long term, which can be appealing to shareholders. The agreement's impact on net sales and earnings should be monitored closely, as it may influence the company's stock performance and valuation.
From a market perspective, the resolution of patent disputes can have a positive effect on a company's reputation and its relationships with partners and customers. By securing a license to BD's port patents and granting a license to its catheter patents, AngioDynamics ensures continuity in its product offerings and may even open up opportunities for new product development.
Additionally, the settlement could be perceived as a commitment to ethical business practices and respect for intellectual property, which can enhance AngioDynamics' brand image. It is also beneficial for the medical technology market as a whole, as it encourages companies to collaborate rather than engage in costly legal battles. This collaborative environment could potentially lead to innovations and improvements in patient care.
Under the terms of the settlement, BD will grant a license to AngioDynamics under certain of BD’s port patents and AngioDynamics will grant BD a license under certain of AngioDynamics’ catheter patents. AngioDynamics will make a one-time lump sum payment to BD in the amount of
AngioDynamics will also make six minimum annual payments to BD of
The agreement concludes a multi-year patent dispute between the parties.
“We are pleased to bring this long-standing litigation to a successful conclusion that will reduce our ongoing legal spend and lift a more than ten-year distraction to the Company,” commented Jim Clemmer, President and Chief Executive Officer of AngioDynamics, Inc. “The settlement essentially allows us to spread what would have been two years of future legal fees over the course of six years. Today’s settlement also provides us with additional clarity and certainty and enables our team to remain focused on our top priorities – driving innovation and profitable growth in attractive end markets and delivering value to our shareholders.”
About AngioDynamics, Inc.
AngioDynamics is a leading and transformative medical technology company focused on restoring healthy blood flow in the body’s vascular system, expanding cancer treatment options and improving patient quality of life.
The Company’s innovative technologies and devices are chosen by talented physicians in fast-growing healthcare markets to treat unmet patient needs. For more information, visit www.angiodynamics.com.
Safe Harbor
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding AngioDynamics’ expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include the words such as “expects,” “reaffirms,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “projects,” “optimistic,” or variations of such words and similar expressions, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Investors are cautioned that actual events or results may differ materially from AngioDynamics’ expectations, expressed or implied. Factors that may affect the actual results achieved by AngioDynamics include, without limitation, the scale and scope of the COVID-19 global pandemic, the ability of AngioDynamics to develop its existing and new products, technological advances and patents attained by competitors, infringement of AngioDynamics’ technology or assertions that AngioDynamics’ technology infringes the technology of third parties, the ability of AngioDynamics to effectively compete against competitors that have substantially greater resources, future actions by the FDA or other regulatory agencies, domestic and foreign healthcare reforms and government regulations, results of pending or future clinical trials, overall economic conditions (including inflation, labor shortages and supply chain challenges including the cost and availability of raw materials), the results of on-going litigation, challenges with respect to third-party distributors or joint venture partners or collaborators, the results of sales efforts, the effects of product recalls and product liability claims, changes in key personnel, the ability of AngioDynamics to execute on strategic initiatives, the effects of economic, credit and capital market conditions, general market conditions, market acceptance, foreign currency exchange rate fluctuations, the effects on pricing from group purchasing organizations and competition, the ability of AngioDynamics to obtain regulatory clearances or approval of its products, or to integrate acquired businesses, as well as the risk factors listed from time to time in AngioDynamics’ SEC filings, including but not limited to its Annual Report on Form 10-K for the year ended May 31, 2023. AngioDynamics does not assume any obligation to publicly update or revise any forward-looking statements for any reason.
AngioDynamics, the AngioDynamics logo and Auryon are trademarks and/or registered trademarks of AngioDynamics, Inc., an affiliate or subsidiary. All other trademarks are property of their respective owners.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240401305298/en/
Investor Contact:
Stephen Trowbridge
Executive Vice President & CFO
518-795-1408
strowbridge@angiodynamics.com
Media Contact:
Saleem Cheeks
Vice President, Communications
518-795-1174
scheeks@angiodynamics.com
Source: AngioDynamics, Inc.
FAQ
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