(Reuters) - A federal appeals court on Friday threw out an antitrust verdict that ordered medical device maker Becton Dickinson and Co (BDX.N) to pay rival Retractable Technologies Inc (RVP.A) $340 million in damages over its marketing of safety syringes.
Shares of Retractable tumbled more than 50 percent and hit their lowest level in roughly 3-1/2 years.
The 5th U.S. Circuit Court of Appeals in New Orleans called Retractable’s claim that Becton violated the Sherman Act by trying to monopolize the U.S. safety syringe market “infirm as a matter of law.”
Writing for a 3-0 panel, Judge Edith Jones also called “unsupported and incoherent” the allegation that Becton “tainted” the market for retractable syringes while secretly plotting to offer its own once Retractable’s patents expired.
“RTI has not demonstrated that BD engaged in predatory or anticompetitive conduct,” Jones wrote.
But the appeals court agreed that Franklin Lakes, New Jersey-based Becton could be held liable for falsely advertising that its needles were sharper and wasted less medicine.
It ordered a lower court judge to decide how much profit Becton should give up as a result.
Safety syringes are designed to protect patients from needlestick injuries and contamination.
Both Retractable and Becton, and their law firms, did not immediately respond to requests for comment.
Shares of Retractable were down $1.26, or 51.4 percent, at $1.19 in afternoon trading, after earlier falling as low as $1.15. Becton shares were up 0.4 percent at $165.36.
Retractable, based in Little Elm, Texas, accused Becton of trying to thwart competition by offering loyalty discounts and rebates, or requiring that customers not buy syringes elsewhere.
In September 2013, a federal jury in Texas awarded Retractable roughly $113.5 million in damages, which was later tripled.
That verdict later became the basis for an injunction requiring Becton to tell customers about its false claims.
Jones voided that injunction, but said a substitute based on the false advertising violations was “theoretically possible.”
The case is Retractable Technologies Inc et al v. Becton Dickinson & Co, 5th U.S. Circuit Court of Appeals, No. 14-41384.
Reporting by Jonathan Stempel in New York; Editing by Leslie Adler