Genus: Third Update on US Court Case
Animal genetics firm Genus (LON:GNS) has delivered its third update on the ongoing US anti-trust court case against Inguran LLC (Sexing Technologies).
• Jury has found that GNS should pay a total of US$2.0m in damages for breach of confidentiality obligations and breach of the two Sexing Technologies patents.
• GNS will also be required to pay an ongoing royalty of US$1.75 per straw on commercialisation of its own sexed semen processing technology.
• Following the finding that Sexing Technologies was wilfully maintaining a monopoly, GNS is now seeking an injunction from the court to allow early termination of its 2012 semen sorting agreement (ninety days’ notice).
VSA Comment
We view the damages award as fairly light given previous settlements in this sector and although GNS will be required to pay an ongoing royalty, the good news is that the company will be free to commercialise its own sexed semen processing technology. This will likely result in an operating cost saving of c£5m, minus the royalties paid to Sexing Technologies.
Whether this is launched earlier than September 2017 (when the 2012 agreement is scheduled to end) will depend on the result of GNS’ application for termination of the agreement, which is due to be decided upon in the coming days.
With GNS clearly believing that its sexed semen technology performs better than the Sexing Technologies process, we would expect GNS to rapidly gain market share in this area, once it is free to launch its own product into the market. As a reminder GNS’ sexed semen operations currently make up 5-10% of GNS’ total straw sales.