More shareholders sue Medtronic over Infuse claims

Infuse

Medtronic (NYSE:MDT) found itself at the center of another shareholder lawsuit accusing it of artificially boosting its stock price and forcing the company to repurchase more than $2.8 billion of its own shares at inflated rates.

In a lawsuit filed this week, a clutch of investors accuse Medtronic’s top brass of making misleading statements in filings with the SEC, calls with analysts, press releases and other public statements to conceal that it was actively promoting off-label use of its Infuse bone growth protein, which was in turn causing problems for patients, according to court documents.

"Unbeknownst to shareholders, the company was risking adverse regulatory actions, investigations, lawsuits, and declining sales," according to the shareholders’ complaint. "The improper statements and omissions have devastated Medtronic’s credibility."

"Under the board’s authorization, the company bought back more than $2,847,113,040 worth of its shares at a weighted average price of $50.39," according to the complaint. "Tellingly, this weighted average price is substantially higher than Medtronic’s share price of $31.60 on November 18, 2008, when its true business health was revealed."

The lawsuit names Medtronic directors and executives, including former CEO Bill Hawkins and current CEO Omar Ishrak.

The Infuse line has been under investigation since 2008 over concerns that the product’s sales were driven primarily by active promotion of off-label uses. The device giant settled a DOJ lawsuit in December 2011 for $23.5 million without admitting wrongdoing, but is still on the hook in a separate shareholder lawsuit also accusing it of inflating share prices using misleading statements about Infuse. In that case, the shareholders demanded confidential documents from an undisclosed witness who staunchly refused to reproduce them on the grounds that they presented "a real and appreciable danger of self-incrimination."

The plaintiffs, led by the Minneapolis Firefighter’s Relief Assn., accused Medtronic, former CEOs Bill Hawkins and Arthur Collins Jr. and CFO Gary Ellis of making "materially false and misleading statements and omissions concerning the sale, promotion, and marketing" of Infuse, according to legal filings.

MDT shares closed 2.2% higher to $38.43 as of about 3:00 p.m. today.

RSS From Medical Design & Outsourcing

  • Molex delivers ISO 13485-compliant, medical-grade surgical cables from its class 100,000 clean room facility
    Molex, LLC operates a fully ISO 146441-1:1999 Class 8-certified clean room, satisfying strict particulate contamination levels specified by ISO-compliant requirements. Located in Thailand, the facility has less than 100,000 particulates (≥0.5µm) per cubic foot of air and manufactures a variety of ISO 13485-compliant medical cables and surgical cables used in operating theatres, hospitals, laboratories and […]
  • Swept-Source OCT: Patent license agreement between Massachusetts General Hospital and Heidelberg Engineering
    Heidelberg Engineering has entered into a patent license agreement with Massachusetts General Hospital (MGH) in Boston. The agreement grants global and exclusive rights to 77 basic patents and patent applications which relate to swept-source OCT technology and its application in ophthalmology. Spectral domain OCT has become indispensable to eye care professionals worldwide to diagnose and […]
  • MIT’s MultiFab presents a stark challenge to incumbent 3D Printer manufacturers’ hardware, software, and business Models
    MIT’s Computational Fabrication Group recently announced the MultiFab, a low-cost 3D printer that can combine up to 10 different resins in one part and also includes a 3D scanning system to identify and fix errors during production. According to Lux Research, these capabilities are rare in commercial 3D printers today due to the manufacturers’ need […]
  • AVX releases Accu-P MP medical grade film chip capacitors for medical devices
    AVX Corporation, a leading manufacturer of passive components and interconnect solutions, has released a new series of thin film chip capacitors specifically designed to meet the demanding performance specifications for implantable medical devices. Delivering extremely tight capacitive tolerances, exceptionally repeatable performance, and remarkably low ESR and high Q at high frequencies—including VHF, UHF, and RF […]
  • RIVANNA commences manufacturing of its Accuro device
    Rivanna Medical announced that it has begun manufacturing its FDA-cleared Accuro device, a handheld and untethered smart-phone-sized device that is designed to guide spinal anesthesia with automated 3D navigation technology in addition to ultrasound imaging of abdominal, musculoskeletal, cardiac and peripheral vascular anatomies. The product will be launched at the ASA annual meeting in San […]
  • FDA seeks public input on Quality Metrics guidance
    by Oliver Wolf, Senior Product Manager, MasterControl In line with the general shift towards risk-driven approaches in the quality management world, FDA is now taking steps towards applying those same principles to its own auditing schedule. At the end of July, the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation […]
  • First ‘Ear Wear’ for Active Adults Debuts with MDHearingAid FIT
    If you’ve burned out your ears with earbuds, headphones or decades of other audio abuse but aren’t ready for your grandmother’s hearing aids, not to worry! The new MDHearingAid FIT gets you back in the game with a tiny, FDA-registered, one-size-fits-most solution that doesn’t block your ear canal like old-fashioned in-the-ear hearing aids. The FIT feels […]
  • CardioGenics enters into manufacturing agreement with Ontario-based Plasticap
    CardioGenics Holdings, developer for the In-Vitro-Diagnostics (“IVD”) testing market, announced that it has entered into a manufacturing agreement with Plasticap of Ontario, Canada, pursuant to which Plasticap will manufacture CardioGenics’ proprietary self-metering cartridges for its QL Care analyzer. The term of the agreement is three years and the purchase price for each cartridge shall be […]
  • MTD Micro Molding releases micro materials menu
    MTD Micro Molding, a long-time leader in micro-injection molding, has released an updated “Materials Menu” of materials that can be successfully micromolded to help guide engineers at medical device companies. Material selection is a crucial step in product manufacturability. The correct material drives tolerance, dimension, strength, usabality, speed-to-market, design, critical features, and cost. Through MTD’s […]
  • MedTech Chat: Elastic technology for drug delivery
    Dr. Zhen Gu and Dr. Yong Zhu from North Carolina State University are both co-senior authors of a research paper describing their recent work. Dr. Gu, Dr. Zhu and other researchers from North Carolina State University and the University of North Carolina at Chapel Hill have developed a drug delivery technology that consists of an […]
  • B. Braun’s OEM Division offers large bore normally closed low-pressure check valves
    Infusion therapy and pain management device manufacturer B. Braun said today it is offering normally closed large-bore low-pressure check valves through its valve-focused contract manufacturing OEM division. The valves, offered by Bethlehem, Pa.-based B. Braun, are designed for the intermittent injection of fluids during medical treatment and open automatically when pressure is applied. The newly […]

Leave a Reply