OraSure Agrees To Pay $3 Mln To Inverness For Settlement Of Patent Lawsuit; Sees Wider Loss In Q4

11/19/2009 1:53 PM ET

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(RTTNews) - Thursday, diagnostic products maker OraSure Technologies Inc. (OSUR: News ), said that it settled a patent infringement lawsuit with Inverness Medical Innovations Inc. (IMA: News ) and Church & Dwight Co Inc. (CHD: News ), agreeing to pay Inverness a sum of $3 million in cash. OraSure now expects a wider loss for the fourth quarter.

Following the settlement related to HIV diagnostic products, Inverness agreed to grant OraSure certain licenses to its lateral flow patents. The companies also agreed to exchange distribution rights to certain products.

OraSure will now get a non-exclusive, royalty-bearing, lateral flow patent license for the OraQuick HIV-1/2, OraQuick HCV test and other visually read HIV and HCV products worldwide.

The company will also obtain a non-exclusive license to Inverness' patents for visually read products for the detection of certain infectious diseases, metabolic disorders, cancer and autoimmune disorders, and for certain rapid, point-of-care tests for flu, strep, drugs of abuse and pregnancy as private label products in the United States.

Inverness, on the other hand, got exclusive distribution rights to the OraQuick HCV test in the employee health services and home healthcare markets and in acute care clinics located in pharmacies and other mass retail outlets in the United States.

OraQuick range from OraSure represent a rapid test platform designed to test oral fluid, whole blood plasma and serum samples for the presence of various antibodies or analytes. The OraQuick rapid HIV testing products accounted for $35.3 million in net sales for the company in 2008.

Reflecting the material impact of the settlement, Bethlehem, Pennsylvania- based OraSure now expects a wider loss between $0.10 to $0.11 per share for the fourth quarter, while the prior view was $0.08 to $0.09 per share.

On average, analysts polled by Thomson Reuters anticipate the company to post a loss of 8 cents a share. Analysts' estimates typically exclude one-time items.

OSUR is currently trading down 15 cents or 3.46%, at $4.19 on the Nasdaq. The stock ranged between $2.16 and $4.55 in the 52 week scale.