MINNEAPOLIS (AP) -- Medtronic has agreed to pay more than $1 billion to settle long-standing patent litigation with fellow medical device maker Edwards Lifesciences over replacement heart valves.
The Minneapolis company also said Tuesday a heavy charge from that settlement helped drop its fiscal fourth-quarter profit 54 percent, but Medtronic's earnings still matched Wall Street expectations, not counting that one-time item.
Medtronic Inc. and Irvine, California-based Edwards Lifesciences Corp. have been entangled in litigation for several years over Medtronic's CoreValve heart valve system. Edwards has said it infringes on patents protecting its Sapien product. Both are replacement heart valves delivered through minimally invasive surgery.
Under the deal announced Tuesday, Medtronic will pay Edwards a one-time sum of $750 million and royalty payments of no less than $40 million annually through April 2022 based on CoreValve sales.
The companies also will dismiss all legal matters and have agreed not to sue each other anywhere in the world over aortic and all other transcatheter heart valves for eight years.
In the fiscal fourth quarter, Medtronic earned $448 million, or 44 cents per share. That compares to $969 million, or 95 cents per share, last year. Not counting the settlement charge, adjusted results in this year's quarter totaled $1.12 per share.
Medtronic's revenue rose 2.4 percent to $4.57 billion.
That missed analyst expectations for $4.58 billion, according to FactSet.
Shares of Medtronic slipped 30 cents to $60.04 less than an hour before markets opened Tuesday. But the stock was still close to its 52-week high price of $62.90, which it hit in early April.
Edwards Lifesciences, meanwhile, climbed $1.52 to $88.