Quidel, Beckman Coulter End Ongoing BNP Business Litigation

Quidel Corporation, a provider of rapid diagnostic testing solutions, cellular-based virology assays, and molecular diagnostic systems, entered into agreements with Beckman Coulter resolving ongoing litigation and providing for the transition of the BNP Business to Beckman Coulter. Under these agreements, Beckman Coulter will pay Quidel cash payments of between $70 million and $75 million per year through 2029.
 
“We are pleased to announce this agreement as this is a major step forward for both Quidel and Beckman Coulter, while supporting the healthcare customers we serve,” said Douglas Bryant, president and CEO of Quidel Corporation. “The transactions resolve ongoing litigation that began shortly after Quidel purchased the BNP Business from Alere in October 2017. Entry into the agreements enable us to focus on expanding our core businesses and executing on our longer-term strategy while also creating a stable cash flow stream for the remainder of the term of the existing BNP supply agreement.”
 
“For Quidel, the mission of democratizing the benefits of diagnostic testing for infectious disease, heart health, and other conditions at diverse points-of-care is our main priority and expected to continue to drive growth for our business.”
 
As consideration for the arrangements, including Quidel’s continued supply to Beckman Coulter of the Quidel antibody used in manufacture of the BNP assay, during each of calendar years 2022 through and including 2029, Quidel will receive a minimum payment of $70 million (with amounts of $17.5 million payable quarterly), and a maximum payment of $75 million, with the additional $5 million dependent on sales volume of Beckman Coulter assays. Such minimum and maximum payments will be pro-rated for 2021, based on the period commencing on the date of the initial commercial transition to Beckman Coulter, through December 31, 2021. The initial commercial transition, including in the U.S., is expected to be completed by late August 2021.
 
Pursuant to a Master Agreement, in connection with the transactions, on a country by country basis, Quidel will discontinue offering the Quidel BNP assay and Beckman Coulter will offer its own branded BNP assay to the market. Prior to Beckman Coulter introducing its own branded product to the market, in certain countries Quidel will grant Beckman Coulter exclusive rights to distribute the Quidel branded BNP Assay. The commercial transition in all countries is expected to be completed before the end of 2021.
 
Quidel purchased the BNP Business from Alere in connection with its acquisition by Abbott Laboratories in 2017. Under an existing BNP Supply Agreement, Quidel provides Beckman Coulter with antibodies and certain other components, and Beckman Coulter acts as Quidel’s contract manufacturer for the BNP assay, which runs exclusively on Beckman Coulter analyzers. The transition under the Master Agreement provides stability to Quidel as a result of the minimum payment arrangement through 2029, while providing Beckman Coulter customers an uninterrupted supply of BNP assays.
 
Concurrent with entering into the Master Agreement, Quidel and Beckman Coulter entered in a Settlement Agreement to resolve all disputes relating to the existing BNP Supply Agreement, among other matters. Under that agreement, within 5 business days of signing, Beckman Coulter will dismiss with prejudice the complaint against Quidel that was filed in the Superior Court for the County of San Diego, Calif.