Histogen Wins Legal Ruling in Saga of Entrepreneurial Perseverance

Xconomy San Diego — 

[Corrected 8/27/13, 5:50 pm. See below.] Back in 2011, when a federal judge in San Diego issued a summary judgment for San Diego-based Histogen in a patent dispute, CEO Gail Naughton proclaimed, “We are happy now to have this matter officially behind us.”

That didn’t exactly turn out to be the case. SkinMedica, the Carlsbad, CA, company that sued Histogen for patent infringement almost three years ago, appealed the case to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C.

After hearing arguments in May, a three-judge appellate court panel upheld the lower-court ruling in a 2-1 decision issued Friday. In a statement issued by Histogen today, Naughton says, “We are excited to have confirmation… that Histogen’s technology is unique, and outside of SkinMedica’s patent rights.”

The litigation came close to extinguishing Histogen. The regenerative medicine startup, founded in 2007, was on the verge of closing on $2.4 million in funding when SkinMedica filed the patent suit in early 2009. The investors withdrew their financial support, and Histogen was forced to lay off most of its employees to conserve cash. Naughton kept the company alive on her own cash and credit.

Gail Naughton

Gail Naughton

Now Histogen is almost in the same position it was four years ago. Naughton told Brad Fikes of U-T San Diego that Histogen is trying to raise another investment round—she hopes to raise as much as $30 million—and the timing of the appellate ruling is fortuitous.

For Naughton, the saga could probably serve as a business school case study in entrepreneurial perseverance.

Her quest to develop … Next Page »

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