Healthcare Industry News: CryoLife
News Release - March 12, 2015
CryoLife Provides Update on PerClot LitigationATLANTA, March 12, 2015 -- (Healthcare Sales & Marketing Network) -- CryoLife, Inc. (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.
CryoLife, Inc. is a leader in medical device manufacturing and distribution and in the processing and distribution of implantable living human tissues for use in cardiac and vascular surgeries. It operates throughout the U.S. and internationally. CryoLife manufactures and distributes BioGlue® Surgical Adhesive, an FDA-approved adjunct to sutures and staples for use in adult patients in open surgical repair of large vessels. BioGlue is also CE marked in Europe for use in soft tissue repair and has received additional marketing approvals in several other countries throughout the world. CryoLife's BioFoam® Surgical Matrix is CE marked in Europe for use as an adjunct to hemostasis in cardiovascular surgery and on abdominal parenchymal tissues (liver and spleen) when control of bleeding by ligature or conventional methods is ineffective or impractical. CryoLife distributes PerClot®, a powdered hemostat, in Europe and other select international countries. CryoLife is conducting a pivotal clinical trial in the U.S. for potential FDA approval of the surgical version of PerClot. CryoLife specializes in the treatment of coronary artery disease for severe angina using a laser console system and single-use, fiber-optic handpieces to perform a surgical procedure known as Transmyocardial Revascularization (TMR). CryoLife markets the HeRO® Graft, which is a solution for end-stage renal disease in certain hemodialysis patients. CryoLife distributes ProCol®, a natural biological graft derived from a bovine mesenteric vein that provides vascular access for end-stage renal disease hemodialysis patients, which is approved for sale in the U.S. CryoLife also distributes PhotoFix™ Decellularized Bovine Pericardium, a proven, clinically effective tissue substitute that has undergone a dye-mediated photo-oxidation fixation process, is biocompatible without toxicity, and is derived from bovine pericardium, a material known for reliable consistency and strength with handling characteristics similar to autologous pericardium. CryoLife's CryoValve® SG pulmonary heart valve, processed using CryoLife's proprietary SynerGraft® technology, has FDA 510(k) clearance for the replacement of diseased, damaged, malformed, or malfunctioning native or prosthetic pulmonary valves. CryoLife's CryoPatch® SG pulmonary cardiac patch has FDA 510(k) clearance for the repair or reconstruction of the right ventricular outflow tract (RVOT), which is a surgery commonly performed in children with congenital heart defects.
Statements made in this press release that look forward in time or that express management's beliefs, expectations, or hopes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of management at the time such statements are made and are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations. These statements include those regarding the anticipated timing of the PerClot IDE clinical trial, the strength of our case in our patent litigation against Medafor, Inc. regarding PerClot (the "Medafor Litigation"), and our financial guidance for 2015. The risks and uncertainties affecting these statements include that: there is no guarantee that the FDA will approve the surgical version of PerClot for distribution in the U.S. in accordance with our expected timeframe, or at all; clinical trials are subject to a number of risks, including unanticipated reactions or results, delays, and cost overages; we may ultimately be unsuccessful in our clinical trial; there is no guarantee that we will ultimately prevail in the Medafor Litigation, and if we do not prevail, we will likely be prohibited from selling PerClot in the U.S., or we may have to pay substantial royalties in order to sell PerClot in the U.S.; the Court's order with respect to its ruling on Medafor's preliminary injunction motion will likely require that we cease further selling and distribution activities with respect to PerClot Topical, and it could require that we take further actions that require significant costs or disruptions to our business; the Medafor Litigation will be expensive, it may continue for longer and be costlier than we anticipate; legal costs and the timing of their incurrence are difficult to predict with any degree of certainty, and we may incur costs associated with the action earlier or later than we anticipate; and to the extent that our litigation expenses associated with the Medafor Litigation exceed the amount currently included in our guidance projections, our 2015 expenses and earnings per share could be significantly negatively affected.. These risks and uncertainties include the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K for the year ended December 31, 2014 and our subsequent filings with the SEC. CryoLife does not undertake to update its forward-looking statements.
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