Buying intellectual property at bargain prices?

Dan Haugen at MinnPost wrote of an IP acquistion by St. Jude:

St. Jude Medical has picked up some bargain-bin intellectual property from a liquidating Seattle neuromodulation company.
Northstar Neuroscience had been developing a nonsurgical brain-stimulation treatment to help stroke survivors regain hand and arm functions. The company's stock plunged 84 percent after the treatment failed in a key clinical trial, the Seattle Times reported.

St. Jude Medical is acquiring the company's intellectual property and non-cash assets for a payment of $2 million.

PioneerPress wrote:

The market for so-called "neuromodulation" devices is viewed as a key growth area for medical device companies including St. Jude Medical and its cross-town rivals Medtronic, which is based in Fridley, and Boston Scientific, which operates large divisions in Arden Hills and Maple Grove.

Northstar Neuroscience was developing a treatment called cortical stimulation that was designed to deliver targeted stimulation to the cerebral cortex. Northstar's stock began trading publicly in 2006, but plunged in January 2008 after a key study failed to show the treatment helped improve hand and arm function in stroke survivors.

Following the setback, Northstar initiated a study of the treatment for patients with depression — an area that both St. Jude Medical and Medtronic currently are pursuing with a different neuromodulation therapy known as deep brain stimulation.
"For 2 million bucks, I think that's probably a decent investment," said Jan Wald, an analyst with Stanford Group. "It gives them another shot on goal for depression. And there were other indications that Northstar was pursuing — really early-stage — that (St. Jude) might be able to leverage down the road."

IPBiz notes one has to match the IP with the business model. Ask Xerox PARC.

[IPBiz post 5000 made on 10 June 2009]