CryoLife Appeals Rare Injunction In Patent Case

CryoLife Inc. on Wednesday filed its notice of appeal to the Federal Circuit of a preliminary injunction barring its PerClot blood-clotting powder, one day after a Delaware federal judge ordered Medafor Inc. to pay CryoLife $100,000 in the event that any court finds the injunction was wrongly issued. 
C.R. Bard Inc. unit Medafor satisfied the test for securing a preliminary injunction, including showing a reasonable likelihood that it will succeed on the merits and would suffer irreparable harm if CryoLife's product remained on the market, U.S. District Judge Sue L. Robinson ruled last month, in a relatively rare instance of a judge granting a preliminary injunction in a patent case. On Wednesday, CryoLife filed its notice of appeal of the injunction to the Federal Circuit.

The judge said Medafor has represented that it is able to pay the $100,000 if the condition on the injunction is met and that CryoLife agreed with the representation, adding that the requirement was proper and adequate security for the injunction.

“Pursuant to Federal Rule of Civil Procedure 65(c), this court orders that if this court or another court of competent jurisdiction finds this preliminary injunction wrongfully enjoined CryoLife, Medafor shall pay CryoLife $100,000 within ten (10) days of the order vacating or reversing this injunction,” the judge said.

CryoLife's PerClot Topical, launched last fall, competes with a Medafor product called Arista that was approved by the U.S. Food and Drug Administration in 2006. Both are powders used to control bleeding when conventional methods are ineffective.

The dispute began in April, when CryoLife filed suit seeking declaratory judgment that PerClot Topical would not infringe Medafor's patent. Medafor responded by filing an infringement counterclaim and seeking a preliminary injunction. CryoLife began selling PerClot Topical last fall.

Judge Robinson found that Medafor had shown that CryoLife likely infringes and that CryoLife was unlikely to show that the patent is invalid.

Medafor Injunction Holds Up US Perclot Topical

CryoLife, Inc. (NYSE: CRY), a leading medical device and tissue processing company focused on cardiac and vascular surgery, today provided an update on its ongoing litigation with C.R. Bard, Inc. and certain of its subsidiaries regarding PerClot. The U.S. District Court for the District of Delaware (the "Court") has allowed CryoLife's declaratory judgment lawsuit against C.R. Bard's Medafor, Inc. subsidiary ("Medafor") to proceed. The Court also granted Medafor's motion for a preliminary injunction with respect to CryoLife's marketing and sale of PerClot Topical in the U.S. CryoLife is currently awaiting the Court's order, which it expects will provide details regarding the scope of the injunction.

Pat Mackin, CryoLife President and Chief Executive Officer, said, "While we are disappointed with the District Court's ruling on the preliminary injunction motion, we continue to believe we have a strong case and remain focused on securing the best long-term outcome in the litigation for our shareholders. We remain on track to begin enrollment in our PerClot IDE clinical trial for surgical applications during the first half of 2015, which would position us for potential FDA approval in the second half of 2017."

In April 2014, CryoLife filed a declaratory judgment lawsuit against C.R. Bard and certain of its subsidiaries, including Medafor, requesting that the Court declare that CryoLife's manufacture, use, offer for sale, and sale of PerClot in the U.S. does not and would not infringe Medafor's U.S. Patent No. 6,060,461 (the "'461 Patent"). In addition CryoLife requested that the Court declare that the claims of the '461 Patent are invalid. In September 2014, Medafor filed a motion for a preliminary injunction against CryoLife.

The preliminary injunction applies to PerClot Topical, which is in the early stages of launch in the U.S. CryoLife included approximately$1.5 million in PerClot Topical sales in its previously announced 2015 financial guidance. At this low-volume level, the Company was anticipating the gross margin for PerClot Topical to be approximately breakeven. The Company's previously announced earnings per share guidance for 2015 included $3 million to $4 million in expense related to the litigation with C.R. Bard. The Company continues to expect that this represents the high end of potential litigation expenses for the year related to this matter, and it will re-assess its litigation strategy and provide appropriate updates to its financial guidance, if any, after receiving the Court's order.

See official papers below....

https://drive.google.com/file/d/0B6J8c60Kq5rVUVBka0ExTjdYaWc/view?usp=sharing
https://drive.google.com/file/d/0B6J8c60Kq5rVSmhSWXVFd1daNWM/view?usp=sharing

HaemoCer approved for use in China and Canada

BioCer Entwicklungs GmbH (BCE), a German implantable biological medical device development and manufacturing company, announced today that it has achieved approval to commence sales of HaemoCer™, an Absorbable Polysaccharide Hemostat (APH), in the People's Republic of China.

"BioCer has now achieved near comprehensive Asia-Pacific regional representation, and the addition of the PRC approval of HaemoCer™ is a significant milestone," Dr Markus Heinlein, Managing Director stated. "The entry into China of our first product HaemoCer™ has been assisted by the early establishment of regional sales representation in the Asia-Pacific region. BCE are pleased Chinese surgeons and patients will now share the benefits of our technology. Our new Health Canada approval is also further evidence of strong international acceptance of our technology."

The PRC approval of HaemoCer™ expands an international sales network encompassing Australia, Hong Kong, India, Korea,Malaysia, New Zealand, Singapore and Thailand within the APEC region. BCE will be exhibiting at the EACTS, Milan, Italy, 11-15thOctober and the CMEF, Chongqing, China, 23-26th October 2014. 

Medafor sells to Bard for $200 million, plus incentives that could add another $80 million.

Officials at Medafor Inc., a Brooklyn Center-based maker of a novel blood clotting product, said they’ve been looking for ways to enhance shareholder value — be it an initial public offering, new business relationships or just continuing organic growth. The one thing they weren’t looking for was a buyer, leaders said Monday.

Then the folks at C.R. Bard Inc., a New Jersey-based medical equipment maker, came calling.

Their offer — $200 million in cash now and up to $80 million more if revenue targets are hit in the next two years — proved too attractive to pass up, said Medafor CEO Gary Shope.

Medafor on Monday announced that it has an agreement to be purchased by C.R. Bard’s Davol Inc. division. The transaction has been approved by both companies’ boards of directors, but is subject to approval by Medafor’s shareholders and customary regulatory review.

“The premium price underscores what we have been building on,” Shope said in an interview Monday. “I think the shareholders are being rewarded with a great price.”

Medafor’s appeal has been its plant-based microporous polysaccharide hemospheres technology, which is used in its Arista MPH hemostat product. The product rapidly dehydrates blood and accelerates the body’s natural blood-­clotting process.

Sept. 24 is the target date for shareholder approval, Shope said. The deal values Medafor’s privately held shares at $6.37 per share. The revenue-based incentives are valued at up to $2.82 per share.

It’s a significantly better deal than the $2 per share that Atlanta-based CryoLife Inc. proposed in a takeover bid in 2010. At the time, the Medafor board called the bid “grossly inadequate.” CryoLife was an exclusive-rights distributor for Medafor’s blood-clotting technology in the United States and some international markets. It had also made offers for Medafor in 2008 and 2009, which Medafor also rebuffed.

C.R. Bard said Medafor will add approximately 1 percent to its 2014 revenue.

The company, a maker of vascular, oncology and surgical products, had revenue of about $3 billion last year. Scott Lowry, C.R. Bard vice president and treasurer, said he expects Medafor, which has 33 employees, to have annual revenue of $30 million to $40 million by the end of 2013. Medafor’s products will complement C.R. Bard’s hemostasis unit and broaden its product portfolio, he said.

“We look at this as a growth opportunity,” Lowry said. “Our plan is to grow this business.”

He says it is premature to comment on status of Medafor’s management and employees since the deal still needs Medafor shareholder approval and to pass other regulatory requirements. Shope, the Medafor CEO, said he believes that Bard is considering keeping the Medafor organization intact but that “going forward, they will be making their own decisions.”

John Houston, an attorney at Fredrikson & Byron who served as Medafor’s lead legal counsel for the transaction, said: “This really was an offer that came out of left field. It was not solicited and it was not anticipated.”

Officials from Bard had met with two of Medafor’s senior officers at a conference in Spain less than a year ago, he said.

According to C.R. Bard’s statement on the acquisition, the global market for surgical hemostats is over $1.4 billion. “The Arista hemostat provides a great alternative to other commercially available hemostats while providing strong synergy with our Progel Sealant technology and sales channel,” said Timothy Ring, C.R. Bard’s chairman and CEO.

Collagen Based Hemostats

Davol Inc., a subsidiary of C. R. Bard Inc., develops, manufactures, and markets Avitene Microfibrillar Collagen Hemostat and Ultrafoam™ Collagen Sponge, topical hemostatic agents, and other specialty medical products for use in surgical procedures worldwide.

J&J (Ethicon) Collagen Hemostat for precise application. Controlled application minimizes product waste. Handles easily without sticking to wet gloves or instruments.

Gelita Medical The FDA has classified Pharmaceutical Gelatin as GRAS (Generally Recognized As Safe) and it has been used in over 200 million procedures.

Vascular Solutions D-Stat Flowable is a thick, yet flowable hemostat designed for topical application to stop bleeding at vascular access sites following percutaneous procedures.

Orthovita Vitagel is composed of microfibrillar collagen and thrombin in combination with the patient’s own plasma which contains fibrinogen and platelets.

B Braun Lyostypt® is a wet-stable collagen hemostat. Collagen leads to thrombocyte adhesion and to activation of coagulation factor XII. Therefore, collagen is very effective in hemostasis