Palomar Announces Patent License Agreement with Cynosure
November 07 2006 - 8:00AM
PR Newswire (US)
Palomar Continues Successful Patent Enforcement Strategy
BURLINGTON, Mass., Nov. 7 /PRNewswire-FirstCall/ -- Palomar Medical
Technologies Inc. (NASDAQ:PMTI) announced today the execution of a
Non-Exclusive Patent License Agreement with Cynosure, Inc.
(NASDAQ:CYNO) under Palomar's standard license terms. Under this
Agreement, Palomar granted to Cynosure a non-exclusive, royalty
bearing license to U.S. Patent Nos. 5,735,844 and 5,595,568 and
foreign counterparts. Palomar will conduct a conference call and
webcast today at 10:00 AM Eastern Time. If you would like to
participate, please call (800) 299-7098 or listen to the webcast in
the Investor Relations section of the Company's website at
http://www.palomarmedical.com/. Under this Agreement, Cynosure will
pay Palomar $10 million by November 8, 2006 as a 7.5% royalty on
sales of their laser- and lamp-based hair removal systems made
before October 1, 2006. Beginning October 1, 2006, Cynosure will
pay Palomar a 7.5% royalty on sales of seven light-based hair
removal systems as well as future developed hair removal systems.
In return for a non-royalty bearing (fully paid up), non-exclusive
license to eight Cynosure patents and patent applications,
including counterparts, Palomar granted Cynosure a two year
reduction in royalty rate for the Apogee Elite System only.
Specifically, from October 1, 2006 to September 30, 2007, Cynosure
will pay a 5% royalty on sales of the Apogee Elite System and from
October 1, 2007 to September 30, 2008, Cynosure will pay Palomar a
6.5% royalty on sales of the Apogee Elite System. The full 7.5%
royalty shall apply to sales of all Cynosure light-based hair
removal products, including the Apogee Elite System, after October
1, 2008. Patricia Davis, Senior Vice President and General Counsel
of Palomar, commented, "Palomar's competitors are on notice
regarding these patents. Since settling our patent infringement
lawsuit against Cutera in June, Palomar has filed patent
infringement lawsuits against Candela Corporation and Alma Lasers,
Inc. Palomar intends to continue its strategy of vigorously
enforcing our patent position. Licensing these patents to Cynosure
without the need for litigation further substantiates the strength
of these patents, and we believe other companies may follow the
same course of action." Joseph P. Caruso, President and Chief
Executive Officer of Palomar, commented, "As I said when we settled
our lawsuit against Cutera in the spring, Palomar pioneered the
cosmetic light-based industry with the first high-powered
light-based hair removal system in 1997. Since then, this industry
has become one of the fastest growing segments in the medical
industry with hair removal procedures being the most popular
cosmetic light-based procedure performed today. We will not stand
by while companies infringe our patents. We will take legal action
to prevent continued infringement. This strategy should continue to
provide significant financial benefit to Palomar and its
shareholders." In this Agreement with Cynosure and in accordance
with Palomar's standard license terms, the royalty rate is
applicable to all light sources for hair removal. When all light
sources in a system are capable of hair removal, the royalty is
applied to 100% of the total sale price. When systems include light
sources not for hair removal, the royalty rate is applied to the
hair removal portion of the entire system. For a system with two or
more light sources for hair removal and one or more other light
sources not for hair removal, the royalty is applied to 70% of the
total sale price, and for systems with one light source for hair
removal and one or more other light sources not for hair removal,
the royalty is applied to 50% of the total sale price. Under
Palomar's patent license agreement with the General Hospital
Corporation, Palomar will pay to the General Hospital Corporation
40% of all payments from Cynosure. For more information, please see
the Non-Exclusive Patent License Agreement filed as Exhibit 99.2 to
a Current Report on Form 8-K filed today. About Palomar Medical
Technologies, Inc.: Palomar is a leading researcher and developer
of light-based systems for cosmetic treatments. Palomar pioneered
the optical hair removal field, when, in 1997, it introduced the
first high-powered laser hair removal system. Since then, many of
the major advances in light-based hair removal have been based on
Palomar technology. There are now millions of light-based cosmetic
procedures performed around the world every year in physicians'
offices, clinics, spas and salons. Palomar is testing many new and
exciting applications to further advance the hair removal market
and other cosmetic applications. Palomar is uniquely focused on
developing proprietary light-based technology for introduction to
the mass markets. Palomar has an agreement with The Gillette
Company to develop and potentially commercialize a patented
home-use, light-based hair removal device for women (please note
that in October 2005, Procter & Gamble Company completed its
acquisition of Gillette. Under the Development and License
Agreement, Procter & Gamble, as the acquiring party, assumed
all of Gillette's rights and obligations.) Palomar also has an
agreement with Johnson & Johnson Consumer Companies to develop
and potentially commercialize home-use, light-based devices for
reducing or reshaping body fat including cellulite, reducing the
appearance of skin aging, and reducing or preventing acne, and was
awarded a contract by the Department of the Army to develop a
light-based self-treatment device for Pseudofolliculitis Barbae
("PFB"). For more information on Palomar and its products, visit
Palomar's website at http://www.palomarmedical.com/. To continue
receiving the most up-to-date information and latest news on
Palomar as it happens, sign up to receive automatic e-mail alerts
by going to the Investor Relations' section of the website. With
the exception of the historical information contained in this
release, the matters described herein contain forward-looking
statements, including but not limited to statements relating to new
markets, development and introduction of new products, and
financial projections that involve risk and uncertainties that may
individually or mutually impact the matters herein, and cause
actual results, events and performance to differ materially from
such forward-looking statements. These risk factors include, but
are not limited to, results of future operations, technological
difficulties in developing or introducing new products, the results
of future research, lack of product demand and market acceptance
for current and future products, the effect of economic conditions,
challenges in managing joint ventures and research with third
parties and government contracts, the impact of competitive
products and pricing, governmental regulations with respect to
medical devices, including whether FDA clearance will be obtained
for future products and additional applications, the results of
litigation, difficulties in collecting royalties, potential
infringement of third-party intellectual property rights, and/or
other factors, which are detailed from time to time in the
Company's SEC reports, including the report on Form 10-K for the
year ended December 31, 2005 and the Company's quarterly reports on
Form 10-Q. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. The Company undertakes no obligation to release publicly
the result of any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
Contacts: Kayla Castle Investor Relations Manager Palomar Medical
Technologies, Inc. 781-993-2411 DATASOURCE: Palomar Medical
Technologies Inc. CONTACT: Kayla Castle, Investor Relations Manager
for Palomar Medical Technologies, Inc., +1-781-993-2411, Web site:
http://www.palomarmedical.com/ Company News On-Call:
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