It’s shaping up to be a tough day for Medtronic Inc. (NYSE:MDT), as news of a federal false claims investigation follows questions from the Food & Drug Administration about a study of one of its deep-brain stimulation devices.
The Fridley, Minn.-based medical devices monolith revealed in a March 10 securities filing that the U.S. Attorney for Massachusetts issued a "civil investigative demand" Feb. 22 for documents in a false claims probe into the relationship of its CoreValve subsidiary with the Burlington, Mass.-based Lahey Clinic, "specifically relating to cardiologists at the clinic, CoreValve Inc. … and the Lahey Clinic, and certain employees of both [Medtronic] and the clinic, among other topics."
Lahey Clinic is a teaching hospital affiliated with Tufts University’s medical school. Medtronic said it would "comply as required" with the terms of the demand, according to the filing, but didn’t reveal any more details on the probe.
The company spent $700 million on CoreValve and its aortic valve replacement technology in April 2009. That technology is at the center of a patents spat with Edwards Lifesciences (NYSE:EW), which lost a round in a German court in February. The CoreValve product is not for sale or in clinical trials here, according to Medtronic.
News of the federal probe followed hard on the heels of word that the FDA is questioning the efficacy of Medtronics’ Activa DBS device based on data from a clinical trial of its use in treating epilepsy. The deep-brain stimulation device failed to meet the major goals of the study, according to FDA documents, which also questioned its safety.