Medtronic will settle Abbott stent suit for $400 millions

NEW YORK -- Medtronic Inc. said Monday it agreed to pay Abbott Laboratories $400 million to settle patent lawsuits related to the design of artery-opening stents, some of the most lucrative medical devices marketed by either company.

The two companies agreed not to sue each other for at least 10 years over matters related to stents, which are mesh metal tubes used to prop open arteries that have been cleared of fatty plaque. Medtronic said it will take an unspecified charge in its fiscal first quarter. Medtronic will also make a $42 million payment to privately held evYsio Medical Devices, as part of a sublicense to Abbott of evYsio's stent design.

Minneapolis-based Medtronic said the agreement settles all outstanding coronary stent litigation between the companies. Abbott said the litigation between the companies dates to 1998 and involves lawsuits in the U.S. and Europe, all of which are now settled. It said the patents related to the design of stents, their manufacture and use, and the systems that help physicians insert them into the body of a patient.

Libertyville Township-based Abbott said it will record a one-time gain in the third quarter from the settlement.

Both Medtronic and Abbott market drug-coated stents, which leak drugs to prevent arteries from reclogging regrowth. The stents quickly became the fastest-selling medical devices in recent history after their introduction in 2003.

However, questions about the devices' safety compared with bare-metal stents slowed growth beginning in 2006. Medtronic's Endeavor and Abbott's Xience stents entered the market in 2008, competing against older offerings from Boston Scientific Corp. and Johnson & Johnson.

Natick, Mass.-based Boston Scientific reported last week that it currently holds half the U.S. market for drug-coated stents.