ReGen Biologics won a round in its long battle with the FDA over its MenaFlex knee implant last week when a federal appeals court vacated the watchdog agency’s move to rescind clearance for the collagen mesh implant and ordered "further proceedings" for the device.

The Hackensack, N.J.-based company declared bankruptcy in 2011, a year after the FDA’s Center for Devices & Radiological Health pulled its 510(k) clearance for the Menaflex device. ReGen sued in the U.S. District Court for the District of Columbia to overturn the rescission, calling it "arbitrary and capricious, an abuse of discretion, not in accordance with law, and in excess of statutory jurisdiction, authority and limitations."

The district court disagreed in April 2013, granting the FDA’s motion to dismiss on the grounds that the federal watchdog agency was within its rights to turn its green light for Menaflex to red. ReGen’s bankruptcy successor, Ivy Sports Medicine, appealed to the U.S. Court of Appeals for the D.C. Circuit, arguing that the appeals court’s own precedent in another case, American Methyl and New Jersey, held that "when Congress has provided a mechanism capable of rectifying mistaken actions … it is not reasonable to infer authority to reconsider agency action," according to court documents.

The D.C. Circuit appeals court agreed Sept. 26 in 2-1 decision, with the majority ruling that the FDA should have gone through the procedure established by Congress, according to court documents.

"Because Congress created a procedure for FDA to reclassify medical devices, FDA may not short-circuit that process through what it calls its inherent authority to reverse its substantial equivalence determinations for those devices. FDA’s order rescinding [MenaFlex]’s substantial equivalence determination on the basis of inherent authority was therefore invalid. We reverse the judgment of the District Court. We direct the District Court to vacate FDA’s decision and to remand to the agency for further proceedings," Judge Brett Kavanaugh wrote for the majority.

In a dissenting opinion, Judge Nina Pillard wrote that Congress did not intend its reclassification procedure "to be the exclusive method to reconsider assessments of substantial equivalence, so it does not displace the FDA’s implicit authority to correct its own errors."

" I believe the majority errs in reading the Act to require that the agency’s erroneous approval of a medical device via the abbreviated substantial equivalence process remain frozen in place unless the agency takes the long way around, through notice and comment rulemaking required for ‘Classification Changes,’ to undo it, and so I respectfully dissent," Pillard wrote.

The decision adds yet another layer to ReGen’s protracted and public battle with the FDA. The rescission of the Menaflex device, a bio-absorbable mesh implant designed to encourage the re-growth of damaged knee cartilage, forced ReGen to pull the device from the U.S. market until clinical trials proved its safety and efficacy. ReGen wasn’t shy about voicing its displeasure over the rescission, with then-CEO Gerald Bisbee calling it "totally unbelievable."

The Menaflex 510(k) clearance in December 2008 came over the objections of FDA scientists. In September 2009 the agency admitted that undue influence from 4 New Jersey congressmen and former commissioner Andrew von Eschenbach affected the decision to green-light the device and announced a probe into the foofaraw. In March 2011, the FDA’s Orthopedic & Rehabilitation Devices Panel decided that, while the implant is reasonably safe, its effectiveness needed to be further analyzed. That decision came the same week that the FDA released a report saying ReGen failed to produce adequate evidence that device was safe before it was cleared to hit the market.

At the time ReGen said it sank $30 million into its successful 510(k) bid, "only to have the agency reverse decisions made by previous CDRH officials by stating that they were in error with no substantial evidence that is true."