USA — Alcon Vision has agreed to pay Johnson & Johnson’s Surgical Vision Inc US$199 million to settle intellectual property disputes over laser eye-surgery devices.
According to a press release, the payment would be a one-time settlement to resolve various worldwide intellectual property issues, and both companies had reached a cross-licensing agreement.
There was no immediate comment from Johnson & Johnson representatives regarding the settlement, and the copyright trial, which was set to begin this week in a Delaware federal court, was over claims that Alcon had stolen software from J&J’s iFS Laser system.
In 2021, J&J accused Alcon of stealing computer code used for LASIK vision correction surgery. At the time, J&J sought an injunction to ban the sale of the devices, which illegally used code on a “grand and shocking scale.”
During a 2021 hearing, U.S. District Judge Colm Connolly had said there was “overwhelming” evidence that Alcon had intentionally copied J&J’s code.
The case, which is AMO Development LLC v. Alcon Vision LLC, is currently being heard in the U.S. District Court for the District of Delaware under No. 1:20-cv-00842. Alcon had denied the allegations.
The system is used for LASIK vision correction and other surgeries, and Alcon allegedly utilized it in its LenSx system to treat cataracts. A J&J expert argued that the company was entitled to at least US$3.1 billion in damages.
Additionally, both companies had accused each other of patent infringement, which had been put on hold by the Delaware court. J&J’s Catalys laser cataract surgery system competes with Alcon’s LenSx.
AMO Development LLC, which J&J had acquired in 2017, had sued Alcon in 2020, alleging that Alcon had stolen thousands of lines of its source code.
In other news, Johnson & Johnson has released its financial guidance for the 2023 fiscal year, which exceeded Wall Street expectations.
The company expects adjusted earnings of US$10.55 per share in 2023, which is higher than the FactSet consensus estimate of US$10.33.
Despite inflationary pressures expected to persist in 2023, the company’s chief financial officer, Joseph Wolk, said that Johnson & Johnson has prioritized top investments and managed costs.
The positive guidance could help alleviate concerns about inflationary pressures affecting the pharmaceutical industry.
Johnson & Johnson’s earnings often act as a pacesetter for the large-cap biopharma sector, and the company’s guidance could indicate that big pharma represents a defensive haven in the current market environment.
The 2023 guidance reflects the entire business, including the consumer health division, which is planned to be separated this year.
Johnson & Johnson’s pharmaceutical sales for the fourth quarter of 2022 were US$13.2 billion, up 6.8% from the same quarter last year. Sales of medical devices were up 6.1%, while sales in consumer health were up 3.9%.
After the spinoff of its consumer health segment, Johnson & Johnson is expected to experience improved margins, especially since this was the only division that experienced a decline in sales in 2022, amounting to US$15 billion, down by 0.5% from 2021.
The spinoff company, named Kenvue, filed for an initial public offering on January 4th and is expected to go public this year.
With the separation, Kenvue will now assume responsibility for the ongoing talcum powder lawsuits, while Johnson & Johnson will maintain an 80.1% stake in the new entity for the time being.