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Jury Awards Ravgen $57M in NIPT Patent Suit Against Natera

NEW YORK – A jury in the US District Court for the Western District of Texas determined after the close of the market Tuesday that Natera must pay $57 million for infringing on Ravgen's patents covering methods to identify genetic abnormalities through prenatal screening.

Ravgen, a small Maryland-based firm, had filed the lawsuit in June 2020 accusing Natera's Panorama and Vistara noninvasive prenatal genetic tests, its Signatera circulating tumor DNA test, and its Prospera cell-free DNA transplant rejection test of infringing Ravgen's US Patents No. 7,727,720 and 7,332,277, both of which are titled "Methods for detection of genetic disorders." Those patents expired in March 2023, but Ravgen had filed a series of lawsuits against companies in the prenatal testing space and sought negotiations with about a dozen more to seek compensation on allegations of past infringement.

"We are very happy with the jury's verdict," Ravgen attorney Kerri-Ann Limbeek, a partner at law firm Desmarais, said in a statement. "The trial clearly showed that Ravgen's noninvasive prenatal technology was infringed, and we appreciate the jury recognizing that and awarding Ravgen the royalties it is rightly owed."

Natera had denied it had infringed either patent and countered that the '720 and '277 patents should be declared invalid because they are too vague and that the claimed inventions would have been anticipated by previous research. Following the verdict, the company said in a statement that the jury determined Natera had not willfully infringed on the patents and that the decision will have no impact on Natera's ability to serve its customers. Natera plans to file an appeal.

The stakes were high for Natera and Ravgen. In 2022, Ravgen secured $273 million in damages from Laboratory Corporation of America based on a determination that a fair royalty would be $100 each for the estimated 2.73 million NIPTs sold by Labcorp, and a federal judge ruled last year that Labcorp would need to pay an additional $100 million for "egregious" violations of the patents.

Ravgen previously secured settlements with Illumina, Quest, and PerkinElmer, whose life sciences and diagnostics business is now a separate company called Revvity, and it defeated challenges before the US Patent and Trademark Office's Patent Trial and Appeal Board. In January 2023, Labcorp filed an appeal in the US Court of Appeals for the Federal Circuit over a PTAB ruling in Ravgen's favor.

Limbeek said Ravgen's patents have played a foundational role in the creation of prenatal genetic testing products.

Ravgen has ongoing lawsuits against Roche and its Ariosa subsidiary as well as against Biora Therapeutics, formerly named Progenity, which exited its diagnostic testing business in 2021.

Cowen analyst Dan Brennan wrote in a note to investors following Tuesday's verdict that Natera investors should view the news positively considering Ravgen was suing for $410 million and could have received even more if the infringement was found to be willful. He noted that Natera plans to appeal the verdict, and he expects a federal appellate court will reduce the damages.

Natera's share price was up about 6 percent, to $66.42 per share, in early morning trading Wednesday.