ReGen Biologics: We’re too broke to file our annual report

ReGen Biologics Inc. (PINK:RGBO) doesn’t have enough money to pay for its annual earnings filing with the Securities & Exchange Commission.

The embattled maker of the Menaflex knee implant, which has been in a protracted and public battle with the FDA for nearly two years, said in a regulatory filing that, “due to an inability to obtain adequate external financing the registrant has not been able to complete the necessary accounting and internal control procedures required for preparing the Form 10-K and management could not complete Management’s Discussion and Analysis of the financial and other information required to be included in the Form 10-K.”

Regen officials said they do not expect to file the form until after the company has secured additional outside funding.

The news adds yet another layer to ReGen story, which captured the attention of the medical device industry as the Menaflex saga with the Food & Drug Administration unspooled. Last October, the FDA said it will rescind the 510(k) clearance it granted the Menaflex device, a bio-absorbable mesh implant designed to encourage the re-growth of damaged knee cartilage, in late 2008.

The rescission means Hackensack, N.J.-based ReGen has to keep the device off the U.S. market until it can prove its safety and effectiveness to the FDA’s satisfaction.

ReGen wasn’t shy about voicing its displeasure over the rescission, with CEO Gerald Bisbee calling it “totally unbelievable.”

The FDA said it wants ReGen to "discuss the appropriate marketing pathway for the device and what data it would need to provide a reasonable assurance of safety and effectiveness," five years after the company began the 510(k) application process.

ReGen has sunk $30 million into meeting requirements set by the FDA’s Center for Devices & Radiological Health, according to Bisbee, "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.”

The Menaflex 510(k) clearance in December 2008 came 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.

In March, the agency’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.

“It’s unbelievable that after more than five years of 510(k) review of this product — and after being told by the ODE Director and the CDRH Director to file two separate 510(k) submissions for this device as a surgical mesh — [CDRH head Dr. Jeffrey] Shuren now says that they were wrong,” Bisbee said in prepared remarks on March 22. “This arbitrary and unsubstantiated intention is an example of why the investment community is increasingly wary of investing in companies with products requiring FDA approval.”

That wasn’t the only shot Bisbee fired across the FDA’s bow.

“We and they both know the agency has no legal authority to rescind its clearance of Menaflex. There is ample evidence the FDA completely botched its review of our Collagen Scaffold at every stage,” he said. “After six years of unthinkable bias, mistakes and blunders, we are opting out of the FDA’s administrative process and pursuing other legal options for continuing to market Menaflex to U.S. orthopedic surgeons and their patients.”