Medtronic, Inc. (MDT) recently settled its lawsuit with AGA Medical Corporation, a division of AGA Medical Holdings, Inc. (AGAM), regarding infringement of its Jervis patent family. The lawsuit was initiated in 2007 by Medtronic.

Per the settlement, AGA Medical will pay Medtronic $35 million over the next four years. In turn, Medtronic will grant a non-exclusive license to AGA Medical to use the Jervis patent family. Based in Plymouth, Minn., AGA Medical manufactures devices to treat heart disease and repair structural problems in the heart.

It has been tested that Medtronic’s Jervis patent family covers the use of stress to restrain certain self-expanding medical devices made of nitinol. Nitinol is a metal alloy used in the manufacture of medical devices.
The last of the patent in the Jervis patent family will expire in 2018. Medtronic has already licensed its Jervis patent family to several medical device manufacturers in the U.S.  

Medtronic is one of the world’s leading medical technology companies, specializing in implantable and interventional therapy devices and products. The company’s main competitors include St. Jude Medical (STJ) and Boston Scientific Corp. (BSX).

Medtronic’s management has a typical “ONE Medtronic” approach that encompasses the following goals: drive sustainable long-term growth of 9%−11% through innovation, focus on operating margins − increase by 300 to 400 basis points, EPS growth of 11%−14% and return a minimum of 40%−50% of free cash flow to shareholders annually, and align the organization for consistent execution. Medtronic’s results till date indicate that the company is well on track to achieve these goals.

Currently, we are ‘Neutral’ on Medtronic.

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