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(CUTR) - Get Cutera Inc. Report

agreed to settle a four-year-old patent infringement suit brought by

Palomar Medical

( PMTI) over technology used in laser-based hair removal systems.

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Shares of Cutera soared on the settlement as Wall Street welcomed any outcome that didn't forbid it from selling the equipment in question. In premarket trading, the stock jumped $6.86, or 36.5%, to $25.64.

Cutera will pay Palomar $22 million to cover past royalties and legal fees, and pay Palomar a 7.5% royalty on the future sale of systems using the technology. The company will expense the payment in its second quarter, and said it now expects a loss of $12.8 million, or 89 cents a share, in the period, which ends June 30.

Excluding items, Cutera expects to earn $1.2 million, or 8 cents a share, on sales of $23 million in the second quarter. Analysts surveyed by Thomson First Call were forecasting earnings of 12 cents a share on sales of $23 million.

For the year, the company expects to earn 82 cents a share before items on sales of $68.8 million. Analysts were forecasting earnings of 94 cents a share on sales of $98.6 million.

"We have been engaged in this litigation since February 2002, and are pleased to get the cost and related distraction behind us," Cutera said. "Both the uncertainty associated with a jury trial, and the costly, protracted schedule of a second lawsuit and possible appeals have helped us determine that global resolution of these matters is the best solution."

Palomar said: "Cutera has admitted to the infringement, validity and enforceability of the Anderson Patents and agreed not to challenge them in the future."