A Diagnostics & Imaging Week

Stratagene (La Jolla, California) has agreed to pay Third Wave Technologies (Madison, Wisconsin) $10.75 million in cash in an out-of-court settlement regarding issues litigated in U.S. District Court in Wisconsin in September 2005 and appealed to the Federal Circuit in Washington.

The companies said they also have agreed to stay any further litigation for nine months.

The companies also said they will seek either a dismissal without prejudice or an extension of the trial date for Stratagene’s lawsuit against Third Wave in U.S. District Court in Delaware, and they also reported agreeing to a process to resolve that case, or any other disputes, through an agreement that enables either company to seek arbitration of a patent dispute or to resolve it through a royalty-bearing license.

Dr. Joseph Sorge, CEO and chairman of Stratagene, said, “With this settlement, we will be able to redeem our $21 million appeal bond and strengthen our balance sheet by $10.25 million.” Additionally, he said it will enable the company to focus “on executing our long-term growth strategy in molecular diagnostics, including the pursuit of additional partnerships and product development opportunities.”

Kevin Conroy, president/CEO of Third Wave, said, “The settlement has the dual benefit of increasing Third Wave’s cash balance to more than $50 million and allowing us to avoid the multi-million-dollar expense of ongoing litigation. The settlement also gives Third Wave the freedom to expand our molecular diagnostic product menu and [focus on] bringing to market innovative, high-value molecular diagnostics like our FDA-approved HPV products.”

A year ago, Statagene posted a $21 million bond in Third Wave’s name securing the damages and attorneys’ fees awarded to Third Wave ensuring coverage of an award of willful infringement, pending the appeal. A federal jury in the fall of 2006 found that Stratagene infringed two key Third Wave patents covering its proprietary molecular methods and found willful patent infringement, originally set at $5.3 million in damages and tripling the damages to $15.9 million.

Stratagene manufacture life research and diagnostic products in fields ranging across molecular biology, genomics, proteomics, drug discovery and toxicology. Third Wave develops reagents for a variety of DNA and RNA analysis applications.

In other legalities:

• Immucor (Norcross, Georgia) reported the settlement of the charges against its Italian subsidiary related to allegedly improper payments to an Italian physician.

Immucor reported in March that the former head of its Italian subsidiary told the company that he would appeal an Italian judge’s decision that he made illegal payments to physicians.

On Jan. 18, the judge approved a plea bargain agreement under which the subsidiary is required to pay a total of roughly $122,000 in fines, penalties, and restitution to a hospital at which the physician worked, the company said.

The related charges against Dr. Gioacchino De Chirico, the company’s president/CEO, and former president of the subsidiary, have now been sent forward to trial, Immucor said. It said that De Chirico indicates he will contest any charges against him, and the company expects the trial and related appeals to continue “for an extended period of time.”

Immucor said that along with De Chirico it is still seeking to settle the investigation by the Securities Exchange Commission “in the near term.”

Immucor makes reagents and systems used by hospitals, reference laboratories and donor centers to identify certain properties of the cell and serum components of blood prior to transfusion.

• Lester Crawford, long time official of the FDA and short-time commissioner of the agency, faces a fine of $50,000 but will not have to see any jail time, according to recent reports.

The $50,000 fine exceeds what Crawford earned from stocks that he held while he was with the FDA. He is likely to receive probation, in a deal worked out between his attorney and federal prosecutors.

Crawford was to be sentenced earlier this week but sentencing was postponed until Monday, as the result of questions by the presiding magistrate judge who asked lawyers why they hadn’t used certain federal sentencing guidelines in recommending a penalty.

Crawford and his wife Cathy reportedly garnered around $39,000 from exercising options and in dividends from the stocks they held in FDA-regulated companies.

In court, Crawford admitted to falsely reporting that he had sold or did not own stock when he continued holding shares in the firms governed by rules of the FDA.