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Ending a 10-year contract and a bitter legal battle, medical device company Boston Scientific Corp. agreed late Wednesday to pay Medinol Ltd. $750 million, settling claims that it stole the Israeli company’s technology. Analysts had predicted that amount. Natick, Mass.-based Boston Scientific stock was up almost 2 percent Thursday afternoon, trading around $23.60. “We’re delighted that we’ve gotten a full and fair settlement for what Boston Scientific took from us,” said Rory Millson, a spokesman for Tel Aviv-based Medinol. The partnership began in 1995 when Boston Scientific struck a supply agreement with Medinol. Under the agreement, which was to end in October, Medinol would supply Boston Scientific with a stent called the NIRflex. Stents are tiny devices that doctors use to prop open arteries after clearing blockages, and Medinol was once Boston Scientific’s chief supplier. In 2001, while Boston Scientific was pursuing Medinol’s technology through a $2 billion acquisition attempt, Medinol sued the company in U.S. District Court in New York. In an attempt to head off a disaster, Boston Scientific had told Medinol about a secret facility it had set up in Ireland to make stents. The admission, rather than quelling the situation, caused Medinol to sue. The company claimed that Boston Scientific had established the facility in Ireland to usurp Medinol’s stent-making technology in part to make its successful Express and Taxus Express lines of stents. The Taxus stent reached more than $2 billion in U.S. sales during its first year on the market. Medinol was seeking damages of more than $4 billion in lost revenue and royalties. Boston Scientific claimed the plant was legal, and said that Medinol was an unreliable supplier, delaying and sometimes threatening to stem its supply of stents. The Irish plant, the company said, was a necessary backup. Boston Scientific countersued for $400 million in financial losses, claiming the dispute was eroding shareholder value. In December, Judge Alvin K. Hellerstein pushed the two sides to resolve the dispute out of court, saying that they had over-inflated what was merely a contract matter. Failing to reach a resolution, the two sides went to trial in June. In the settlement, the two companies dismissed all claims against each other, including all stent litigation; canceled the supply agreement, which had just a few weeks left; and reached an agreement that arbitration, not lawsuits, would settle all future disputes. “What we got paid for is that they took our NIRflex stent, made a slight adjustment to it and called it the Express, and that’s what they paid for,” Millson said. “We’re a small Israeli company, we’re not as good at marketing, so they have been very successful at marketing their version of our stent.” A representative from Boston Scientific did not return calls seeking comment. Copyright �2005 TDD, LLC. All rights reserved.

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