Palomar Continues Successful Patent Enforcement Strategy
BURLINGTON, Mass., Nov. 7 /PRNewswire-FirstCall/ -- Palomar Medical
Technologies Inc. (Nasdaq: PMTI) announced today the execution of a
Non-Exclusive Patent License Agreement with Cynosure, Inc. (Nasdaq: CYNO)
under Palomar's standard license terms. Under this Agreement, Palomar
granted to Cynosure a non-exclusive, royalty bearing license to U.S. Patent
Nos. 5,735,844 and 5,595,568 and foreign counterparts. Palomar will conduct
a conference call and webcast today at 10:00 AM Eastern Time. If you would
like to participate, please call (800) 299-7098 or listen to the webcast in
the Investor Relations section of the Company's website at
http://www.palomarmedical.com.
Under this Agreement, Cynosure will pay Palomar $10 million by November
8, 2006 as a 7.5% royalty on sales of their laser- and lamp-based hair
removal systems made before October 1, 2006. Beginning October 1, 2006,
Cynosure will pay Palomar a 7.5% royalty on sales of seven light-based hair
removal systems as well as future developed hair removal systems. In return
for a non-royalty bearing (fully paid up), non-exclusive license to eight
Cynosure patents and patent applications, including counterparts, Palomar
granted Cynosure a two year reduction in royalty rate for the Apogee Elite
System only. Specifically, from October 1, 2006 to September 30, 2007,
Cynosure will pay a 5% royalty on sales of the Apogee Elite System and from
October 1, 2007 to September 30, 2008, Cynosure will pay Palomar a 6.5%
royalty on sales of the Apogee Elite System. The full 7.5% royalty shall
apply to sales of all Cynosure light-based hair removal products, including
the Apogee Elite System, after October 1, 2008.
Patricia Davis, Senior Vice President and General Counsel of Palomar,
commented, "Palomar's competitors are on notice regarding these patents.
Since settling our patent infringement lawsuit against Cutera in June,
Palomar has filed patent infringement lawsuits against Candela Corporation
and Alma Lasers, Inc. Palomar intends to continue its strategy of
vigorously enforcing our patent position. Licensing these patents to
Cynosure without the need for litigation further substantiates the strength
of these patents, and we believe other companies may follow the same course
of action."
Joseph P. Caruso, President and Chief Executive Officer of Palomar,
commented, "As I said when we settled our lawsuit against Cutera in the
spring, Palomar pioneered the cosmetic light-based industry with the first
high-powered light-based hair removal system in 1997. Since then, this
industry has become one of the fastest growing segments in the medical
industry with hair removal procedures being the most popular cosmetic
light-based procedure performed today. We will not stand by while companies
infringe our patents. We will take legal action to prevent continued
infringement. This strategy should continue to provide significant
financial benefit to Palomar and its shareholders."
In this Agreement with Cynosure and in accordance with Palomar's
standard license terms, the royalty rate is applicable to all light sources
for hair removal. When all light sources in a system are capable of hair
removal, the royalty is applied to 100% of the total sale price. When
systems include light sources not for hair removal, the royalty rate is
applied to the hair removal portion of the entire system. For a system with
two or more light sources for hair removal and one or more other light
sources not for hair removal, the royalty is applied to 70% of the total
sale price, and for systems with one light source for hair removal and one
or more other light sources not for hair removal, the royalty is applied to
50% of the total sale price.
Under Palomar's patent license agreement with the General Hospital
Corporation, Palomar will pay to the General Hospital Corporation 40% of
all payments from Cynosure.
For more information, please see the Non-Exclusive Patent License
Agreement filed as Exhibit 99.2 to a Current Report on Form 8-K filed
today.
About Palomar Medical Technologies, Inc.:
Palomar is a leading researcher and developer of light-based systems
for cosmetic treatments. Palomar pioneered the optical hair removal field,
when, in 1997, it introduced the first high-powered laser hair removal
system. Since then, many of the major advances in light-based hair removal
have been based on Palomar technology. There are now millions of
light-based cosmetic procedures performed around the world every year in
physicians' offices, clinics, spas and salons. Palomar is testing many new
and exciting applications to further advance the hair removal market and
other cosmetic applications. Palomar is uniquely focused on developing
proprietary light-based technology for introduction to the mass markets.
Palomar has an agreement with The Gillette Company to develop and
potentially commercialize a patented home-use, light-based hair removal
device for women (please note that in October 2005, Procter & Gamble
Company completed its acquisition of Gillette. Under the Development and
License Agreement, Procter & Gamble, as the acquiring party, assumed all of
Gillette's rights and obligations.) Palomar also has an agreement with
Johnson & Johnson Consumer Companies to develop and potentially
commercialize home-use, light-based devices for reducing or reshaping body
fat including cellulite, reducing the appearance of skin aging, and
reducing or preventing acne, and was awarded a contract by the Department
of the Army to develop a light-based self-treatment device for
Pseudofolliculitis Barbae ("PFB").
For more information on Palomar and its products, visit Palomar's
website at http://www.palomarmedical.com. To continue receiving the most
up-to-date information and latest news on Palomar as it happens, sign up to
receive automatic e-mail alerts by going to the Investor Relations' section
of the website.
With the exception of the historical information contained in this
release, the matters described herein contain forward-looking statements,
including but not limited to statements relating to new markets,
development and introduction of new products, and financial projections
that involve risk and uncertainties that may individually or mutually
impact the matters herein, and cause actual results, events and performance
to differ materially from such forward-looking statements. These risk
factors include, but are not limited to, results of future operations,
technological difficulties in developing or introducing new products, the
results of future research, lack of product demand and market acceptance
for current and future products, the effect of economic conditions,
challenges in managing joint ventures and research with third parties and
government contracts, the impact of competitive products and pricing,
governmental regulations with respect to medical devices, including whether
FDA clearance will be obtained for future products and additional
applications, the results of litigation, difficulties in collecting
royalties, potential infringement of third-party intellectual property
rights, and/or other factors, which are detailed from time to time in the
Company's SEC reports, including the report on Form 10-K for the year ended
December 31, 2005 and the Company's quarterly reports on Form 10-Q. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes
no obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Contacts:
Kayla Castle
Investor Relations Manager
Palomar Medical Technologies, Inc.
781-993-2411
ir@palomarmedical.com
SOURCE Palomar Medical Technologies Inc.
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Related links:
http://www.palomarmedical.com
http://www.prnewswire.com/comp/107555.html /
CONTACT:
Kayla Castle, Investor Relations Manager for
Palomar Medical Technologies, Inc., +1-781-993-2411,
ir@palomarmedical.com
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