“This settlement provides certainty and will allow us to more fully focus our time and resources on executing our 2012 business plan.”
Abstract
Alphatec Holdings, Inc. , the parent company of Alphatec Spine, Inc. has reportedly reached a global settlement agreement of two pending lawsuits with Cross Medical Products Inc. and EBI LLC respectively, both of which are Biomet subsidiaries.
Background
Alphatec is a designer, developer, manufacturer and marketer of products for the surgical treatment of spine disorders, with a focus on treating conditions related to the aging spine. In one lawsuit, Cross Medical Products, Inc. claimed that Alphatec Spine had breached a 2003 license agreement with Cross Medical by failing to make certain royalty payments. In the second lawsuit, Alphatec Spine claimed that a subsidiary of Biomet, Inc. EBI, LLC, infringed a patent owned by Alphatec Spine.
The settlements
Alphatec Spine will pay Cross Medical an initial payment of $5 million dollars in addition to which it shall make thirteen payments of $1 million, with the payments made quarterly, and the first payment being due on August 1, 2012, and each subsequent payment due three months thereafter until the final payment, which is due August 1, 2015, is made. The total cash impact of $18 million will be dispersed in the following amounts: $7 million in 2012, $4 million in 2013, $4 million in 2014 and $3 million in 2015.
In addition, pursuant to the settlement, the parties have exchanged covenants not to sue for patent infringement with respect to products that each respective company had on the market as of December 30, 2011.
Under the terms of the settlement, all parties obtained a release of all claims that were the subject of the disputes. No party has admitted liability in connection with the settlement. The settlement also includes an amendment to the April 23, 2003 License Agreement.
Alphatec comments
“While we continue to believe in the strength of our position in this dispute, we felt it served the best interests of our stockholders to proactively settle the matter to eliminate ongoing legal costs resulting from the litigation and remove any uncertainty that is inherent in the litigation process,” said Dirk Kuyper, President and Chief Executive Officer of Alphatec Spine. “This settlement provides certainty and will allow us to more fully focus our time and resources on executing our 2012 business plan.”
Source: Alphatec
published: January 16, 2012 in: Financial, News, Products, Spine