Injunction Lifted on Boston Scientific's Guidezilla - Analyst Blog

Boston Scientific Corporation BSX is once again a hot topic of discussion among all financial market participants. Per the latest development, the company's Guidezilla guide extension catheter was freed of an injunction by the U.S. Court of Appeals for the Federal Circuit.

The verdict was related to the patent infringement lawsuit initiated by Vascular Solutions, Inc. VASC on May 16, 2013, which claimed that Boston Scientific's Guidezilla guide extension catheter infringes three U.S. patents owned by Vascular Solutions. The case was filed in the U.S. District Court for the District of Minnesota demanding monetary and injunctive awards for damages.

Again on May 28, 2013, Vascular Solutions filed an amended complaint adding an allegation of copyright infringement by Boston Scientific. Further, on Jun 10, 2013, Vascular Solutions filed a motion requesting a preliminary injunction.

In response to the allegations, Boston Scientific on Jul 11, 2013, filed a counterclaim, alleging that Vascular Solutions' patents were invalid and that the Guidezilla catheter does not infringe any patent. Instead, Boston Scientific claimed that Vascular Solutions' GuideLiner catheter violates a U.S. patent owned by the former that has recently expired.

Finally, on Dec 12, 2013, the District Court ordered a preliminary injunction on Boston Scientific's Guidezilla guide extension catheter. Additionally, on Dec 23, 2013, the District Court denied Boston Scientific's petition to file a motion to reconsider the preliminary injunction and also lifted the stay on the preliminary injunction effective Jan 13, 2014.

Boston Scientific's Guidezilla guide extension catheter falls within the Interventional Cardiology business of the company, which in turn comes under the company's Cardiovascular segment. Notably, Interventional Cardiology contributed 28.8% to total net sales in 2013. The Guidezilla guide extension catheter was commercially launched in the U.S. in July 2013.

On the other hand, Vascular Solutions' Catheter products constituted the largest product category and contributed approximately 63.0% to total product and service sales during 2013.

However, this verdict is not likely to affect the underlying patent litigation, which is supposed to be up for trial on or after Mar 2015 in the District Court for the District of Minnesota. We view this news as favorable for Boston Scientific but would like to remain on the sidelines until the final verdict for the trial comes in.

Currently, Boston Scientific carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader healthcare industry are Enzymotec Ltd. ENZY and St. Jude Medical Inc. STJ. Enzymotec sports a Zacks Rank #1 (Strong Buy) and St. Jude Medical carries a Zacks Rank #2 (Buy).