Dive Brief:

• A California jury ruled on Wednesday that Axonics did not infringe three of Medtronic’s patents related to sacral neuromodulation.
• The latest decision resolves a lawsuit that has been ongoing since 2019. In the ensuing battle, Axonics challenged the validity of Medtronic’s patents. Medtronic filed additional complaints in Delaware and with the U.S. International Trade Commission, seeking to block sales of Axonics’ devices. 
• A Medtronic spokesperson wrote in an email that the company will “file post-trial motions, and an appeal, if necessary, to overturn this verdict.” The ruling comes as antitrust regulators review Boston Scientific’s proposal to buy Axonics for about $3.7 billion, which was announced in January.

Dive Insight:

Medtronic first sued Axonics in 2019 after it received approval from the Food and Drug Administration for its Axonics r-SNM system, a rechargeable sacral neuromodulation device intended to treat incontinence. 

In the complaint, filed in the U.S. District Court for the Central District of California, Medtronic claimed that Axonics violated four patents describing an implantable lead for electrical stimulation and a rechargeable external energy source. A jury considered three of the patents, finding that Axonics did not infringe on Medtronic’s patents. However, the jury also found that one of Medtronic’s patents was valid.

“A jury of our peers recognized that Axonics’ proprietary tined lead design and temperature sensor technology is differentiated from our competitor’s intellectual property,” Axonics CEO Raymond Cohen said in a statement. “As we have said since this case was first filed in late 2019, our view is that Medtronic’s lawsuit was initiated to stifle competition, limit patient and physician choice, and protect the incumbent’s monopoly in sacral neuromodulation.”

Medtronic plans to appeal, and “will continue fighting to protect and enforce its intellectual property rights with a pending case against Axonics at the International Trade Commission,” the company spokesperson wrote. 

Medtronic filed a complaint with the ITC in February, claiming a feature of Axonics’ system that allows the implant to be worn during MRI scans violates two of its patents. In March, the U.S. Patent Trial and Appeal Board upheld two Medtronic patents challenged by Axonics. 

RBC Capital Markets analyst Shagun Singh wrote in a Thursday research note that the latest jury verdict is a “positive decision” for Axonics and that she still expects Boston Scientific’s acquisition of the company to close in the second half of 2024.

Earlier this year, Boston Scientific received a second request for information from the Federal Trade Commission, bumping back the expected close date from the first half of the year to the second half. 

Singh wrote that “we believe [Boston Scientific] is committed to the [Axonics] deal as its sacral neuromodulation business is their main focus where much of the deal value lies.”

If the acquisition does not close, she thinks other medtech companies could be interested in buying Axonics.