LVCN Ladenburg

A federal jury in Boston, Massachusetts returned a verdict in favor of CardiAQ in a lawsuit filed against Neovasc Inc (US) NVCN. Ladenburg Thalmann’s Jeffrey S. Cohen downgraded the rating for the company from Buy to Neutral, while removing the price target.

The jury found in favor of CardiAQ’s claims for relief for breach of contract, breach of the duty of honesty in contractual performance, and three of CardiAQ's six asserted trade secrets. CardiAQ has been acquired by Edwards Lifesciences Corp EW in 2015.

“The jury awarded US $70 million on the trade secret claim for relief, and no damages on the contractual claims for relief,” analyst Jeffrey Cohen wrote.

Take On The Announcement

The financial ramifications of the case are still unclear, including the timing of the payment(s) of the award. Cohen noted that Neovasc had about $47 million in cash at the end of March 2016. He added that the impact of the decision on the company’s Tiara development was also unclear, with regard to current patents and design. In case, Neovasc is required to alter the valve’s design, it would result in additional design and expenses.

“As a result of the announcement, and until we are able to garner more pertinent information from various parties regarding the company's path ahead, we are reducing our rating from Buy to Neutral with no current associated price target,” Cohen commented.