Alphatec Spine and Cross Medical Products Settle License Agreement Dispute
05 Januar 2012 - 11:54PM
Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of
Alphatec Spine, Inc., a medical device company that designs,
develops, manufactures and markets products for the surgical
treatment of spine disorders, with a focus on treating conditions
related to the aging spine, today announced that it has reached a
global settlement agreement of two pending lawsuits. In the first
lawsuit, Cross Medical Products, Inc. (a subsidiary of Biomet,
Inc.) claimed that Alphatec Spine had breached the April 23, 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.
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.
"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."
As part of the settlement, Alphatec Spine will pay Cross Medical
an initial payment of $5 million dollars. In addition to the
initial payment, Alphatec Spine 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.
Conference Call
Alphatec Spine will host a conference call on January 6, 2012 at
6:00 a.m. PT / 9:00 a.m. ET to discuss the settlement. To
participate in the conference call, please visit the investor
relations section of the Alphatec Spine website at
www.alphatecspine.com. The dial-in numbers are (877) 556-5251 for
domestic callers and (720) 545-0036 for international. A live
webcast of the conference call will be available online from the
investor relations section of the Alphatec Spine website at
www.alphatecspine.com. The webcast will be recorded and will remain
available on the investor relations section of Alphatec Spine's
website for at least 30 days.
About Alphatec Spine
Alphatec Spine, Inc. is a wholly owned subsidiary of Alphatec
Holdings, Inc. (Nasdaq:ATEC). Alphatec Spine is a medical device
company that designs, develops, manufactures and markets products
for the surgical treatment of spine disorders, primarily focused on
the aging spine. The Company's mission is to combine
world-class customer service with innovative, surgeon-driven design
that will help improve the aging patient's quality of
life. The Company is poised to achieve its goal through new
solutions for patients with osteoporosis, stenosis and other aging
spine deformities, improved minimally invasive products and
techniques and integrated biologics solutions. In addition to
its U.S. operations, the Company also markets its products in over
50 international markets through its affiliate, Scient'x S.A.S.,
via a direct salesforce in France, Italy and the United Kingdom and
via independent distributors in the rest of Europe, the Middle East
and Africa, South America and Latin America. In Asia and
Australia, the Company markets its products through its subsidiary,
Alphatec Pacific, Inc., and through Scient'x's distributors in
China, Korea and Australia.
The Alphatec Holdings, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3520
Forward Looking Statements
This press release may contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995 that involve risks and uncertainty. Such statements are
based on management's current expectations and are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements. These forward-looking statements include, but are not
limited to: the impact of the amount of the settlement payments on
Alphatec Spine's business operations; and Alphatec Spine's ability
to accelerate new product momentum, bring to market differentiated
products and commercialize its product pipeline. Alphatec Spine
cautions investors that there can be no assurance that actual
results or business conditions will not differ materially from
those projected or suggested in such forward-looking statements as
a result of various factors, including, but not limited to, the
following: Alphatec Spine's ability to meet its financial guidance,
the growth rate of the spine market related to aging and elderly
patients, uncertainty of success in developing new products or
products currently in Alphatec Spine's pipeline and those products
that are intended to treat disorders prevalent in aging patients,
failure to achieve acceptance of Alphatec Spine's products by the
surgeon community, failure to obtain or maintain the right from
regulatory agencies to market and sell products, or unexpected or
prolonged delays in the process Alphatec Spine's ability to develop
and expand its global business, continuation of favorable third
party payor reimbursement for procedures performed using Alphatec
Spine's products, unanticipated expenses or liabilities or other
adverse events affecting cash flow or Alphatec Spine's ability to
successfully control its costs or achieve profitability,
uncertainty of additional funding, Alphatec Spine's ability to
compete with other competing products and with emerging new
technologies, product liability exposure, patent infringement
claims and claims related to Alphatec Spine's intellectual
property. Please refer to the risks detailed from time to time in
Alphatec Spine's SEC reports, including quarterly reports on Form
10-Q, reports on Form 8-K and annual reports on Form 10-K. Alphatec
Spine disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, unless required by law.
CONTACT: Michael O'Neill
Chief Financial Officer
Alphatec Spine, Inc.
(760) 494-6746
investorrelations@alphatecspine.com
Westwicke Partners
Lynn C. Pieper
(415) 202-5678
lynn.pieper@westwicke.com
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