Treace Files Patent Infringement and Unfair Competition Suit to Protect Lapiplasty® Bunion Technology
Rhea-AI Summary
Treace Medical Concepts, Inc. (NASDAQ: TMCI) has filed a lawsuit against Stryker and its subsidiary Wright Medical Technology, Inc. (NYSE: SYK) for alleged patent infringement and unfair competition. The suit, filed in the U.S. District Court for the District of New Jersey, claims infringement of 9 patents related to Treace's Lapiplasty® 3D Bunion Correction® technologies.
Treace, a pioneer in 3D bunion correction systems, seeks injunctive relief and damages. CEO John T. Treace emphasized the company's role in creating a new segment in the US bunion market and its commitment to protecting intellectual property. He stated that the lawsuit aims to deter competitors from infringing on Treace's patents and reassure shareholders of the company's dedication to innovation.
Despite the legal action, Treace maintains its financial outlook, expecting a 50% improvement in 2024 Adjusted EBITDA compared to 2023 and anticipating Adjusted EBITDA breakeven in 2025.
Positive
- Treace is taking legal action to protect its intellectual property, potentially safeguarding its market position
- The company expects a 50% improvement in 2024 Adjusted EBITDA compared to 2023
- Treace anticipates reaching Adjusted EBITDA breakeven in 2025
- Treace's Lapiplasty® technology has been used in over 100,000 surgical procedures
Negative
- Legal proceedings against a major competitor (Stryker) could be costly and time-consuming
- The lawsuit suggests potential market share threats from competitors
Insights
The lawsuit filed by Treace Medical Concepts against Stryker is a significant development in the medical technology sector, particularly for bunion correction technologies. This legal action alleges infringement of 9 patents related to Treace's Lapiplasty® 3D Bunion Correction® technologies, as well as unfair competition.
Key points to consider:
- The suit seeks both injunctive relief and damages, which could have substantial financial implications for both companies.
- Treace's claim of creating "an entirely new segment of the US bunion market" suggests they view this as a critical market position to defend.
- The allegation of unfair competition, in addition to patent infringement, broadens the scope of the lawsuit and potential consequences.
- This legal action may deter other potential competitors from entering this market segment, potentially strengthening Treace's market position.
For investors, this lawsuit represents both a risk and an opportunity. A favorable outcome could secure Treace's market position and potentially lead to additional revenue through damages or licensing agreements. However, prolonged litigation could be costly and divert resources from R&D and market expansion efforts.
While the lawsuit is significant, it's important to focus on the financial implications mentioned in the article. Treace's CEO provided forward-looking statements regarding the company's financial performance:
- Expectation of
50% improvement in 2024 Adjusted EBITDA compared to full-year 2023 - Projection to reach Adjusted EBITDA breakeven in 2025
These projections suggest management's confidence in the company's financial trajectory, despite the ongoing legal challenges. The anticipated EBITDA improvement indicates potential for stronger operational efficiency and revenue growth.
However, investors should consider:
- Legal costs associated with the lawsuit could impact short-term profitability
- The outcome of the lawsuit could affect future market share and revenue streams
- The company's ability to continue innovating while engaged in litigation
With a market cap of
PONTE VEDRA, Fla., Oct. 14, 2024 (GLOBE NEWSWIRE) -- Treace Medical Concepts, Inc. (“Treace” or the “Company”) (NasdaqGS: TMCI), a medical technology company driving a fundamental shift in the surgical treatment of bunions and related midfoot deformities through its flagship Lapiplasty® and Adductoplasty® Procedures, today announced that it filed a lawsuit against Stryker Corporation and its subsidiary Wright Medical Technology, Inc. (collectively, “Stryker”) (NYSE: SYK), alleging infringement of 9 patents related to Treace’s innovative Lapiplasty® 3D Bunion Correction® technologies and unfair competition. The suit was filed in the United States District Court for the District of New Jersey, and seeks injunctive relief and damages.
“Treace Medical was the first company to develop, patent, and introduce an instrumented 3D bunion correction system, which created an entirely new segment of the US bunion market and successfully built its market presence from zero to becoming a standard of care in bunion surgery over the past ten years,” said John T. Treace, CEO and Founder of Treace. “Our patented technologies have revolutionized the field of hallux valgus treatment, delivering a new paradigm of treatment in over 100,000 surgical procedures to date. Companies such as Stryker, unfortunately, have rushed to capitalize on Treace’s pioneering research and development by launching products that, as detailed in our Complaint, infringe on Treace’s intellectual property. Moreover, we believe Stryker has also commercialized those infringing products in ways that violate competition laws.”
Mr. Treace continued, “This suit not only sends a message to competitors in the marketplace, particularly those that infringe on our intellectual property, but also reassures our shareholders that we are committed to protecting our investments in our pioneering research and technology, which drives our ability to continue to innovate solutions that benefit patients.”
“Today’s action is consistent with what we stated publicly earlier this year, namely that our strategy all along has been to assert and enforce our IP rights,” Mr. Treace said. “We also continue to expect 2024 Adjusted EBITDA to improve approximately
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, the Company’s expected rate of Adjusted EBITDA improvement in 2024 and its expectation of breakeven Adjusted EBITDA in 2025. Forward-looking statements are based on management’s current assumptions and expectations of future events and trends, which affect or may affect the Company’s business, strategy, operations or financial performance, and actual results and other events may differ materially from those expressed or implied in such statements due to numerous risks and uncertainties. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Factors that could cause actual results or other events to differ materially from those contemplated in this press release can be found in the Risk Factors section of Treace’s public filings with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 27, 2024, and its subsequent SEC filings. Because forward-looking statements are inherently subject to risks and uncertainties, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements speak only as of their date and, except to the extent required by law, the Company undertakes no obligation to update these statements, whether as a result of any new information, future developments or otherwise.
About Treace Medical Concepts
Treace Medical Concepts, Inc. is a medical technology company with the goal of advancing the standard of care for the surgical management of bunion and related midfoot deformities. Bunions are complex 3-dimensional deformities that originate from an unstable joint in the middle of the foot and affect approximately 67 million Americans, of which Treace estimates 1.1 million are annual surgical candidates. Treace has pioneered and patented the Lapiplasty® 3D Bunion Correction® System – a combination of instruments, implants, and surgical methods designed to surgically correct all three planes of the bunion deformity and secure the unstable joint, addressing the root cause of the bunion and helping patients get back to their active lifestyles. To further support the needs of bunion patients, Treace has introduced its Adductoplasty® Midfoot Correction System, designed for reproducible surgical correction of the midfoot as well as its Hammertoe PEEK Fixation System designed to address hammertoe, claw toe and mallet toe deformities. The Company continues to expand its footprint in the foot and ankle market with the introduction of its SpeedPlate™ Rapid Compression Implants, an innovative fixation platform with broad versatility across Lapiplasty® and Adductoplasty® procedures, as well as other common bone fusion procedures of the foot. For more information, please visit www.treace.com.
To learn more about Treace, connect with us on LinkedIn, X, Facebook and Instagram.
Contacts:
Treace Medical Concepts
Mark L. Hair
Chief Financial Officer
mhair@treace.net
(904) 373-5940
Investors:
Gilmartin Group
Vivian Cervantes
IR@treace.net
FAQ
What is the reason for Treace Medical Concepts (TMCI) filing a lawsuit against Stryker?
How many patents does the Treace Medical Concepts (TMCI) lawsuit claim Stryker infringed?
What financial projections did Treace Medical Concepts (TMCI) make for 2024 and 2025?
In how many surgical procedures has Treace Medical Concepts' (TMCI) Lapiplasty® technology been used?
