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Danisco, a part of E.I. Du Pont de Nemours’ (DD - Analyst Report) Nutrition and Health business won an appeal that rejects Novozymes’ animal-feed enzyme patent at the European Patent Office (EPO). The technical Board of Appeal at the EPO announced its decision to revoke Novozymes’ Animal Feed Patent, which is the European Patent 1,804,592 (EP'592).
The revocation of the patent will allow Danisco to indulge in commercial activities in Europe while providing the customers with new and innovative solutions on animal feed. Novozymes had initially aimed to enforce EP'592 against Danisco in Denmark, the Netherlands, United Kingdom and Germany.
However, due to the revocation, Novozymes expects that the lawsuits will either be dismissed or withdrawn. As per Danisco, Novozymes’ attempt to enforce the patent was not justified as its patent was neither valid nor infringed. This was also an effort by Novozymes to stop Danisco’s products from entering the market.
Novozymes received a preliminary injunction in Denmark, and the Eastern High Court in Copenhagen had revoked preliminary injunction and ordered Novozymes to pay Danisco a compensation of DKK 1.5 million in legal costs.
DuPont, through its wholly owned subsidiary DuPont Denmark Holding ApS, acquired Danisco for $6.4 billion in May 2011, and assumed a net debt of $0.6 billion. The acquisition strengthens the company’s foothold in the food ingredient and enzyme markets, while expanding its presence in industrial biotechnology and biofuel markets.
In April 2012, DuPont released its first-quarter 2012 financial results. The company reported adjusted earnings of $1.61 per share for the quarter, exceeding the Zacks Consensus Estimate of $1.55. The earnings growth was primarily driven by strong performance in Agriculture and Performance Chemicals and the benefit of prior-year acquisitions in Nutrition & Health and Industrial Biosciences. Including one-time items (customer claim charges of $50 million), earnings came in at $1.57 per share versus $1.52 in the prior-year quarter.
Sales grew 12% to $11,230 million in the first quarter, driven by price hikes and strong sales in the Agriculture segment. However, it missed the Zacks Consensus Estimate of $11,239 million. Sales volumes in the Agriculture segment increased across all regions. However, sales volumes for other segments remained flat in Asia.
DuPont reiterated its full-year 2012 earnings outlook of $4.20 to $4.40 per share, an estimated increase of 7% to 12% compared with 2011, excluding significant items.
The company competes with The Dow Chemical Company (DOW - Analyst Report) and BASF SE (BASFY). It maintains a Zacks #4 Rank, which translates into a short-term (1 to 3 months) Sell rating. We currently have a long-term Neutral recommendation on DuPont.