Jefferies Comments on Nuvasive (NUVA) vs. Medtronic (MDT) Case, NUVA Looks to Be Real Winner
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Price: $39.75 --0%
Rating Summary:
11 Buy, 21 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
11 Buy, 21 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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Nuvasive (Nasdaq: NUVA) has been found in violation of three Medtronic's (NYSE: MDT) patents by a San Diego US District Court jury.
The patents that were violated deal with thoracolumbar spine implants, cervical plate & screw systems, and tissue re-tractors. The infringement on MDT's patents may only end up costing NUVA $101 million as no royalty agreements on future sales were announced. If no future royalty announcements are made, Jefferies notes that this would really limit NUVA's risks.
Medtronic was also deemed in violation of one of NuVasive's patents in the case, damages only totaled $700 thousand for NUVA.
Jefferies highlights that this is only the first battle between the two companies as "future cases to address the remaining six Medtronic patents and certain NuVasive patents alleged to be infringed by the other party." A timeline has not yet been set for the second phase of this litigation.
An analyst at Jefferies comments, "given the likelihood for the two parties to remain embroiled in patent litigation for some time, legal expenses will continue to dampen operating profitability. From an operational standpoint, we continue to believe outperformance relative to guidance and Street consensus is likely with continued share gains for XLIF and despite continued end market sluggishness."
Jefferies currently has a Buy rating on shares of NUVA and a Hold rating on shares of MDT.
The patents that were violated deal with thoracolumbar spine implants, cervical plate & screw systems, and tissue re-tractors. The infringement on MDT's patents may only end up costing NUVA $101 million as no royalty agreements on future sales were announced. If no future royalty announcements are made, Jefferies notes that this would really limit NUVA's risks.
Medtronic was also deemed in violation of one of NuVasive's patents in the case, damages only totaled $700 thousand for NUVA.
Jefferies highlights that this is only the first battle between the two companies as "future cases to address the remaining six Medtronic patents and certain NuVasive patents alleged to be infringed by the other party." A timeline has not yet been set for the second phase of this litigation.
An analyst at Jefferies comments, "given the likelihood for the two parties to remain embroiled in patent litigation for some time, legal expenses will continue to dampen operating profitability. From an operational standpoint, we continue to believe outperformance relative to guidance and Street consensus is likely with continued share gains for XLIF and despite continued end market sluggishness."
Jefferies currently has a Buy rating on shares of NUVA and a Hold rating on shares of MDT.
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