A Ninth Circuit panel this week revived a shareholders suit against Thoratec (NSDQ:THOR), deciding that it was a mistake for a lower court to dismiss the case and that investors had sufficient grounds for claiming that the company misled them.
The securities class action suit was brought against Thoratec in January 2014. Investor Bradley Cooper sued the company on behalf of anyone who bought stock between April 29, 2010, and Nov. 27, 2013, arguing that the company failed to warn investors about a blood clot problem with its HeartMate II implant implicated in a Class I recall.
In 2012, the FDA said an improperly connected component in the implant may result in deformation or tearing of the device’s outflow conduit, putting the patient at risk of serious injury or death. A year before that, a study published in the New England Journal of Medicine showed a sharp increase in the rate of blood clots with the HeartMate II LVAD.
“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s securities, plaintiff and other class members have suffered significant damages,” the lawsuit said.
The Pleasanton, Calif.-based device maker issued a correction notice in February 2012, warning physicians that a small portion of the HeartMate II devices’ sealed outflow graft bend reliefs, designed to prevent a connector between the pump and the aorta from kinking, were not properly connected.
Abbott inherited Thoratec when it bought St. Jude Medical earlier this year. In May, Abbott recalled nearly 29,000 controllers for the HeartMate II implantable heart pump after 26 patients died trying to change out the controllers on their own.