A Food & Drug Administration panel said that, while a knee implant made by ReGen Biologics Inc. (OTC:RGBO) was reasonably safe, the effectiveness of the device needs to be further analyzed.

The Orthopaedic and Rehabilitation Devices Panel at the Center for Devices and Radiological Health met March 23 to re-evaluate the controversial 2008 510(k) clearance of the Hackensack, N.J.-based company’s Menaflex implant.

“The Panel discussed and decided that there was insufficient evidence that the device, at time zero, reinforces and repairs soft tissue injuries,” according to a release. “The panel decided that the tissues that ultimately grow in place of the device, as it degrades, may serve to partially reinforce and repair in the long-term, but not fully and that the definition of repair and replace should be further defined.”

The Menaflex 510(k) clearance in December 2008 came despite the fact that the device often failed and required second operations — and over the objections of FDA scientists who opposed clearing the device. In September 2009 the agency admitted that undue influence from four New Jersey congressmen and former commissioner Andrew von Eschenbach affected the decision to green-light the device and announced an investigation into the foofaraw.

Earlier this week the FDA released a report saying Regen failed to produce adequate evidence that its Menaflex knee implant was safe before it was cleared to hit the market in late 2008.

Despite the strongly worded report that appeared to reject many of ReGen’s claims, the panel said that, due to the low number of device failures, Menaflex could be “viewed as reasonably safe.”

ReGen officials decided the ruling was enough to declare victory, telling MassDevice in a prepared statement attributed to CEO Gerald Bisbee Jr. that they were “gratified that the Orthopedic and Rehabilitation Devices Panel, which met yesterday, concluded that the evidence supports Menaflex’s safety and effectiveness. We were also pleased that the panel confirmed the conclusions of both the Director of FDA’s Office of Device Evaluation and the first advisory panel that the Menaflex is a surgical mesh.”

Bisbee also had some conciliatory words for the federal watchdog agency.

“ReGen’s belief that the agency has treated the company unfairly and FDA’s belief that ReGen had been aggressive during this long process is something both parties should put behind them for the good of patients who can benefit from the Menaflex device and in the interest of good process. We look forward to working with the agency to satisfactorily resolve any remaining differences.”

The panel called for more follow-up on participants in the company’s clinical trials and said “further imaging studies and predetermined endpoints would need to be analyzed.”

Despite the panel’s ruling, ReGen must still wait on an official decision from FDA officials on whether the device can be marketed for sale in the U.S.