CardiAQ Valve Technologies, a leader in the field of Transcatheter Mitral Valve Implantation, announced today that it has filed a federal lawsuit in Boston, Mass. against Neovasc, Inc. for fraud, misappropriation of trade secrets, breach of contract, and unfair and deceptive trade practices. In that lawsuit, CardiAQ seeks to enjoin Neovasc from further developing and commercializing Neovasc’s TMVI technology, including the Tiara, which is based upon CardiAQ trade secrets and know-how. CardiAQ also seeks to have one or more of its employees named as inventors on the Neovasc patent and patent applications that resulted from Neovasc improperly using CardiAQ’s proprietary technology.

In its complaint, CardiAQ alleges that in June of 2009, Neovasc approached CardiAQ and offered to provide services to support CardiAQ’s pre-existing development project for a minimally invasive implantable mitral valve, a product that is expected to help hundreds of thousands of patients suffering from mitral valve regurgitation, with a potential market estimated to be over two billion dollars. Neovasc presented itself as a contract manufacturer and trusted development partner that could provide tissue processing and valve assembly services for start-up heart valve companies. Based upon that representation, the two companies signed a confidentiality agreement and CardiAQ proceeded to openly share its intellectual property, proprietary designs, development updates, prototypes, and other confidential information. Those disclosures encompassed several years of ground-breaking valve prosthesis research and development by CardiAQ. The confidential relationship between Neovasc and CardiAQ continued for 10 months until April of 2010, when CardiAQ relocated to its current headquarters in Irvine, Calif. During that time, Neovasc never once communicated to CardiAQ that Neovasc was pursuing its own internal TMVI program. Neovasc has recently disclosed publicly that its internal TMVI development program began in 2009 – the same time Neovasc was working with CardiAQ under the confidentiality agreement. Moreover, the Neovasc engineer who served as the project leader for CardiAQ’s TMVI activities is also listed as the inventor on Neovasc’s patent and pending patent applications, which Neovasc filed within just a few weeks of its work with CardiAQ coming to an end.

“Coming from a background in contract manufacturing myself, it is shocking that a trusted development partner could take everything it had learned from us to create and advance its own internal TMVI program,” said Brent Ratz, co-founder, President and COO. “There is no doubt in my mind that we will prove that the intimate and early exposure to CardiAQ’s confidential and ground-breaking know-how taught Neovasc what do to and what not to do and greatly accelerated their internal development efforts.” “We recognize that Transcatheter Mitral Valve Implantation has become one of the most competitive spaces in medical devices and will remain that way for years to come,” said Rob Michiels, Chief Executive Officer. “As pioneers in this new field, CardiAQ set the standard for TMVI positioning and anchoring and we will defend our intellectual property and trade secrets vigorously. While it is not our preference to create any distraction from our technical and clinical efforts, this blatant disregard by Neovasc for confidentiality and honorable business practice, as set forth in the complaint, has left us with no choice.” Privately held CardiAQ, headquartered in Irvine, Calif., has developed a proprietary Transcatheter Mitral Valve (TMV) Implant that can be delivered through multiple delivery systems, including both Trans-femoral and Trans-apical. Through its unique anchoring mechanism that engages and utilizes the patient’s native mitral valve anatomy, physicians will be able to accurately and securely implant a new mitral valve within a beating heart, thus avoiding open-heart surgery. The CardiAQ procedures are designed to be performed in a cardiac catheterization laboratory or hybrid operating room. Ultimately, the procedure will result in less trauma to the patient and substantial potential cost-savings to the healthcare system.