Patent Dispute Resolution: A New Chapter for Abbott and DexCom
In a significant development, Abbott (ABT) and DexCom (DXCM) have announced a cross-license agreement, effectively resolving all outstanding patent litigation between the two companies in the U.S. and Europe for the next decade. This agreement, reached on December 20, grants both parties a worldwide, royalty-free, nonexclusive, and fully paid-up license to certain patents and patent applications related to analyte sensing.
A Long-Awaited Resolution
Industry experts had anticipated a settlement between the two companies, given the prolonged patent dispute. As a result, the announcement comes as no surprise. The agreement marks a significant milestone, as it brings an end to the litigation, allowing both companies to focus on their core business operations.
Key Terms of the Agreement
Under the terms of the agreement, both Abbott and DexCom have granted each other access to their respective patents and patent applications related to analyte sensing. This move is expected to foster a more collaborative environment, enabling both companies to drive innovation in the field.
Market Impact
The settlement is likely to have a positive impact on the market, as it removes a significant source of uncertainty for investors. DexCom’s stock, in particular, has been gaining traction, with Citi recently raising its price target to $91 from $85. The American Diabetes Association’s (ADA) guidelines, which were recently updated, are also expected to have a positive impact on the industry, according to Wells Fargo.
A New Era of Cooperation
The agreement between Abbott and DexCom marks a significant shift towards cooperation in the industry. As the two companies move forward, they will be able to leverage each other’s expertise, driving innovation and growth in the field of analyte sensing.
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