The Framingham, Mass.-based heart pump maker, which also beat Wall Street’s expectations last week with its 1st-quarter results, said the lawsuit was filed in a Massachusetts state court in June 2011.
The suit accuses HeartWare, "certain officers and a significant stockholder" of breaching fiduciary duties by allegedly preventing a pair of shareholders from "receiving a payment of the liquidation preference in connection with certain corporate transactions," according to a regulatory filing.
"We do not believe HeartWare International, Inc., HeartWare, Inc. or any of our directors, officers or stockholders have abrogated the rights, or in any way failed to satisfy obligations owed to, any of our stockholders," according to the filing. "Defendants have agreed to pay up to $1.1 million to participating putative class members in exchange for a full and unconditional release of all claims asserted in the litigation, including any and all claims arising from any right to receive a payment upon any liquidation or deemed liquidation event that has arisen or may arise in the future."
A hearing is slated for July 25 to consider final court approval of the settlement, which would see the defendants pay $1.1 million to settle the case. HeartWare said it expects its insurance to cover the hit.
The company also saw its shares gain 6.2% Friday after it reported a 46.6% addition to its 1st-quarter top line. HeartWare posted losses of $18.8 million, or $1.33 per share, on sales of $26.3 million during the 3 months ended March 31. Although that’s nearly double the losses posted during Q1 2011, it was 4¢ lower than analysts expected on Wall Street.
"In the U.S., the recent positive recommendation of the Circulatory System Devices advisory committee is a significant step forward in the U.S. approval process, and we remain focused on working with the FDA as it finalizes its review of our pre-market approval application," president & CEO Doug Godshall said in prepared remarks. "Earlier this week, we completed enrollment in our 450-patient, Endurance destination therapy study, and sites are just beginning to come online for the most recent Continued Access Protocol allocation in our Advance bridge-to-transplant study."
HTWR shares gained 6.2% May 11 on the Q1 results, closing at $81.93. Shares closed at $81.83 today, down a hair.