Star Scientific Gains on News of Possible Settlement with Reynolds American
News that a settlement could be in the works for Star Scientific Inc (NASDAQ:CIGX) in its patent breach case with R.J. Reynolds, a unit of Reynolds American (NYSE:RAI), sent Star shares soaring 29 percent on the Nasdaq on Thursday.
According to a report by Reuters, the smokeless and dissolvable tobacco products company said a federal court has assigned the lawsuit to a magistrate judge for possible settlement. The case regards two Star Scientific patents on methods for curing tobacco leaves that the company claims render the tobacco free of cancer-causing properties.
In a statement, Star Scientific Chairman Paul Perito said, “We are pleased that after ten years of hard-fought litigation — where both sides seldom agreed on issues — the Court’s decision to refer the litigation to a Magistrate Judge for settlement purposes was agreed to by the parties.”
The report said a spokesperson for Star Scientific added that a settlement is not necessarily imminent, but both companies would be looking for common ground for discussion and resolution.
Star Scientific shares tanked last August after the company was denied a new trial against R.J. Reynolds. While shares of Star Scientific were up at $2.81 on Thursday, shares of Reynolds American — the second-largest tobacco company in the U.S. — were down slightly at $40.02.