Natera’s Stock Surges Following Lower Patent Lawsuit Payment
In a surprising turn of events, Natera Inc., a leading genetic testing company, saw its stock surge after being ordered to pay competitor Ravgen $57 million in a patent lawsuit. This amount, significantly lower than the initial $410 million requested by Ravgen, has sparked optimism among investors.
Analysts believe that this ruling will have no major impact on Natera’s plans to achieve cash-flow break-even in 2024. The payment is not expected to be due until after that year, giving the company ample time to strategize and ensure its financial stability.
Despite the unfavorable outcome, Natera remains determined to challenge the jury’s decision by filing an appeal. If the appeal is unsuccessful, the company will have to bear the full brunt of the $57 million in damages.
Interestingly, despite the legal setback, Natera’s stock price experienced a remarkable surge of 7.3% and nearly reached a two-year high. This unexpected boost has left many market analysts intrigued and has raised questions about the market’s perception of the company’s overall value.
The patent battle between Natera and Ravgen began in 2020 when Ravgen accused Natera of infringing on its patents related to methods to prevent cell lysis. Specifically, Ravgen alleged that Natera’s DNA-reading tests, including Panorama, Signatera, and Prospera, had violated its patents.
Ultimately, the jury ruled in favor of Ravgen; however, it awarded a significantly lower amount of damages than initially requested. Furthermore, the jury determined that Natera did not willfully infringe on Ravgen’s patents, highlighting a silver lining for the company amidst the legal proceedings.
Kyle Mikson, an analyst at Canaccord Genuity, believes that Natera’s patent portfolio is often underestimated. Mikson further contends that recent legal victories have shed light on the true value of Natera’s intellectual property.
In addition to legal successes, Natera’s stock recently broke out of a cup-with-handle base, indicating a positive market sentiment. The company has also demonstrated strong performance over the past 12 months, further boosting investor confidence.
While uncertainties surrounding the appeal remain, Natera’s stock surge suggests that investors are optimistic about the company’s future prospects. With an eye towards financial stability and continued innovation, Natera aims to overcome this setback and maintain its leading position in the genetic testing industry.
