A plaintiff purporting to represent Boston Scientific shareholders sued the company yesterday, alleging that it misled investors about the prospects for its pelvic mesh products ahead of an FDA order to halt all U.S. sales of the devices.
Last week the FDA ordered an immediate halt to sales and distribution of Boston’s Uphold Lite and Xenform products; over the next two days investors sent its share price into a tailspin. By the time the markets closed April 17, BSX shares were off some 7.7% to $34.91 apiece (the stock was trading at $36.63 per share, up 3.4%, in early afternoon trading today).
The lawsuit, filed by lead plaintiff Steve Klein in the U.S. District Court for Southern New York, seeks class certification for anyone who owned Boston Scientific shares between February 26, 2015, and April 16 of this year.
“Throughout the class period, defendants made materially false and misleading statements regarding the company’s business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) Boston Scientific’s surgical mesh products indicated for the transvaginal repair of [pelvic organ prolapse] were unsafe; (ii) accordingly, Boston Scientific’s continued marketing and sales of these devices in the United States was unlikely to be sustainable; (iii) separately, the company had sold vaginal mesh implants containing counterfeit or adulterated resin products imported from China; (iv) the foregoing conduct subjected the company to a heightened risk of regulatory scrutiny and/or government investigations; and (v) as a result, the company’s public statements were materially false and misleading at all relevant times,” the lawsuit alleged.
In addition to class-action status, the suit seeks damages, pre- and post-judgment interest and plus legal costs, according to the complaint.