The problems continue to mount for Boston Scientific Corp.’s (NYSE:BSX) beleaguered defibrillator division, as federal investigators launch probes of the recall of all of its defib products.
The U.S. Justice Dept. subpoenaed documents related to the March 15 recall and Securities and Exchange investigators embarked on an informal inquiry, according to an internal memo from BSX general counsel Timothy Pratt obtained by the newspaper.
Boston Scientific pulled all of its defibrillator inventory and halted sales after discovering that it had failed to notify the Food & Drug Administration of a pair of changes to its defib manufacturing process. CEO Ray Elliott told physicians March 29 that the hold, estimated to be costing the company as much as $5 million a day, that the FDA could take as long as 30 days to review the situation.
Now the federal watchdog isn’t the only agency sniffing around the Natick, Mass.-based company’s cardiac rhythm management operation.
"According to the memorandum, SEC and Justice investigators are seeking company documents regarding the company’s discovery that it hadn’t gotten FDA approval, as well as communications with regulators, physicians and stock analysts about the withdrawal. Investigators are also seeking any reports of injuries, the memorandum said,” according to the Journal‘s report. “An informal inquiry denotes an early-stage investigation by the SEC — one that has begun but which hasn’t been formalized by senior staff. Officials at the SEC and Justice Department declined to comment.”
Boston Scientific also declined comment, the newspaper reported.