Here’s Why Neovasc Inc (US) (NVCN) Shares Dipped Today

Neovasc Inc (US) (NASDAQ:NVCN) reported that the District Court in Munich, Germany has partially found in favour of Edwards Lifesciences Corporation (formerly CardiAQ Valve Technologies), in its case against Neovasc. In this case, CardiAQ had claimed ownership rights to one of Neovasc’s European patent applications for its Tiara™ mitral valve replacement technology. The German court found CardiAQ had contributed in part to the invention of the Tiara™ and awarded to CardiAQ co-entitlement rights to the disputed Tiara™ European patent application. There are no monetary awards associated with this matter. Neovasc intends to appeal this decision.

As a result, investor fears set in, leading to nearly 11% decline in shares of Neovasc.

In addition, Neovasc is currently appealing the 2016 decision from the U.S District Court for the District of Massachusetts which among other things granted co-inventorship rights to CardiAQ on one of Neovasc’s granted U.S. patent applications.  This appeal is now before the United States Court of Appeals for the Federal Circuit in Washington D.C.  An expedited appeal schedule has been set with all the briefings from both parties now submitted. The Company expects oral argument on its appeal in August 2017 and a ruling is expected to follow, prior to the end of 2017.

Pending the outcome of the U.S. Court of Appeals, Neovasc, in consultation with its European and North American legal advisors, will vigorously defend its position that the case in Germany is without merit and will explore all options regarding the appellate process.

Leerink analyst Danielle Antalffy recently wrote, “Litigation is ongoing, with NVCN appealing the ruling on $112M in damages. While the sale of its manufacturing assets and a 15% stake in the company to BSX certainly mitigates the risk of the company being unable to operate as a going concern, there is still “material uncertainty” according to management. However, we believe this recent clinical progress is encouraging, and we view NVCN as a front runner to commercialize a first-to-market TMVR (Transcatheter Mitral Valve Replacement) device in what we believe is a multi-billion dollar market opportunity – possibly peaking at as much as ~$9B. As the clinical study progresses and visibility into both outcomes data and timeline to European commercialization improves, we believe NVCN shares can move meaningfully higher to more appropriately reflect the long-term market opportunity.”

Neovasc operates as a medical device company that develops, manufactures, and markets products for the rapidly growing cardiovascular device marketplace. Its products include the Neovasc Reducer for the treatment of refractory angina and the Tiara technology in development for the transcatheter treatment of mitral valve disease. It operates through the following geographical segments: U.S., Europe, and the Rest of the World.


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