Tuesday, June 8, 2010

CryoLife to Submit Bond After Seeking Preliminary Injunction Against Medafor

KENNESAW -- CryoLife Inc. (NYSE: CRY ) likely will be ordered to submit a bond for up to $500,000 after filing an emergency motion for preliminary injunction in a drug distribution dispute with Medafor Inc., according to an SEC filing.
CryoLife, an Atlanta-based maker of medical products that enable heart and blood vessel reconstructive surgery, said it opposed Medafor's demand for a bond in the range of $14 million to $40 million because any injunction would not harm the defendant.
The U.S. District Court in Atlanta said it requires a bond before issuing a preliminary injunction, and ordered the two litigants to submit proposed bond amounts by June 11. The filing states the court is considering a bond in the range of $100,000 to $500,000.
CryoLife accuses Minneapolis-based Medafor of violating a drug distribution agreement by allowing other companies to distribute Hemostase, an absorbable blood-clotting agent manufactured by Medafor, in territories and medical fields reserved exclusively for CryoLife.
Under the agreement, CryoLife said it is the exclusive U.S. distributor of the drug used in cardiac and vascular surgery, excluding those performed at Department of Defense hospitals; and the exclusive distributor internationally, except China and Japan , for all surgeries other than orthopedic and ear, nose and throat surgery.
Medafor, in turn, accuses CryoLife of violating their exclusive distribution deal by selling Hemostase in Spain for uses allegedly barred by the agreement.