Thanakorn Lappattaranan
Update 11:30am: Updates shares, adds analyst comment.
CareDX (NASDAQ:CDNA) pared an earlier loss and gained 8% after a jury awarded $96.3 million to Natera (NASDAQ:NTRA) in a patent dispute. CareDX shares dropped 17% on Friday amid the jury verdict.
The jury awarded Natera $83.7 million in lost profits and $12.6 million in past royalties after ruling that CareDx products, AlloSure and AlloSeq, infringe one of the two Natera patents asserted against CareDx (CDNA), according to a statement from Natera on Monday. A schedule will be set for further proceedings to determine whether CareDx’s future sales of new versions of AlloSeq and AlloSure also infringe the asserted Natera patents.
Natera said previously it successfully invalidated all three of CareDx’s (CDNA) patents that were asserted by CareDx against Natera in a separate lawsuit. The invalidity of CareDx’s patents was affirmed on appeal.
“While this is a postive and yet another legal win for Natera, in some ways we think CareDx dodges a bullet,” BTIG analyst Mark Massaro, who has a neutral on CDNA, wrote in a note on Monday.
The $96 miillion jury verdict is below the $150-$200M payment some feared, according to Massaro. In addition CareDX told BTIG that there is no risk of willful infringement because the consideration was settled in pre-trial motions, “thus rendering treble damages likely a non-event.” CaredDX also told BTIG that jury was dismissed and doesn’t believe that the current AlloSure LDT infringes NTRA’s patent and believes that it’s unlikely CDNA would make to further payments to NTRA on forward revenue.
CareDX (CDNA) on Friday said it intends to seek judicial review of the verdict, according to a statement.
CaredDX said the Friday ruling doesn’t affect access and availability to CareDx’s current offerings, including AlloSure or AlloMap. There is no motion pending for injunctive relief.
