Another shareholder filed suit against medical device company Abiomed (NSDQ:ABMD), alleging that the heart pump maker and its management deliberately concealed allegedly illegal marketing practices for its Impella 2.5 device that led to a U.S. Justice Dept. probe.
Plaintiff Marta Bryceland filed a shareholder derivative lawsuit Feb. 4 in the U.S. District Court for Massachusetts, accusing chairman, president & CEO Michael Minogue and the rest of the company’s directors of issuing falsely rosy statements to artificially inflate its share price, despite knowing of the DoJ investigation.
ABMD shares plunged more than 30% in November 2012 after the Abiomed revealed the Justice Dept. probe, prompting the most recent lawsuit.
"Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) that the company was improperly marketing and/or labeling its Impella 2.5 system; (2) that the company’s financial results would be materially impacted if the company were either forced to stop its improper conduct or unable to continue its improper conduct; (3) that the company lacked adequate internal and financial controls; and (4) that, as a result of the foregoing, the company’s statements were materially false and misleading at all relevant times," according to court documents.
"Abiomed has reviewed the complaint and believes that the allegations are without merit. Abiomed plans to vigorously defend itself against the allegations. Abiomed’s policy is not to discuss pending litigation," the company said in a statement.
It’s the 2nd lawsuit facing the Danvers, Mass.-based company, after shareholders filed a purported class action suit in November 2012, also alleging malfeasance related to the DoJ probe. Unlike that suit, any damages from the most recent derivatives suit will go to Abiomed.
ABMD shares are down today after the company reported a profit decline for its fiscal 3rd quarter. Shares were trading at $13.35 as of about 10:45 this morning, down 7.4%.