Shares of Retractable Technologies (RVP - Get Report) rose nearly 50% on Friday, after Becton Dickinson (BDX - Get Report) announced that it will pay the company $100 million to settle years of litigation over claims that Becton used its market position to hinder competition.
Under the terms of the agreement, Retractable agreed to dismiss its suit against Becton in exchange for the payout. Becton said it will record an after-tax charge of $63 million, or 24 cents a share, in the third quarter.
In reaction, shares of Retractable rose $3.03 to $9.15, hitting a 52-week-high of $9.16 on more than 190,000 shares traded, well past the average daily volume of 16,989 shares. Becton shares rose 21 cents, or 0.4%, to $49.46.
"This agreement will enable us to focus all of our energies and resources on our most important task -- meeting significant health care needs through the production of safe, effective and competitively priced products," said Edward Ludwig, chairman, president and CEO of Becton, in a statement.At the core of the suit was Retractable's VanishPoint safety syringe, which protects doctors and nurses from being accidentally stuck with a used needle. In January 2001, the company filed a lawsuit that claimed Becton, which had a competing product, effectively blocked its entrance into the market, because of its exclusive contracts with hospital suppliers.