In an Aug. 11 opinion, Judge Stanley R. Chesler dismissed Industriens Pensionsforsikring’s claims against former BD CEO Vincent Forlenza and former CFO Christopher Reidy, as well as the part of the complaint involving how BD handled its Feb. 4, 2020 Alaris recall notifications.
The rest of the complaint, however, can proceed against BD and Polen, who was BD’s COO and president until he assumed the corner office on Jan. 28, 2020.
This was Industriens Pensionsforsikring’s third amended complaint, which it bolstered with testimony from confidential witnesses. The confidential sources enabled the complaint to make a plausible assertion that Polen knew of the FDA’s concerns amid a serious software-related recall involving hundreds of thousands of Alaris pumps, according to Chesler’s opinion. FDA concerns included the need for BD to seek a new 510(k) clearance for the software upgrades.
Chesler found that Industriens Pensionsforsikring had sufficiently pleaded their claim against Polen. The allegation, in Chesler’s relating of the plaintiff’s case, is that Polen was in possession of material, nonpublic information when he sold 13,907 shares of BD common stock in open market sales around Dec. 16, 2019 for more than $3.7 million in proceeds. Contemporaneous with Polen’s sales, Industriens Pensionsforsikring purchased 23,754 shares of BD common stock at inflated prices, Chesler said.
The situation with Alaris came to a head in early February 2020, when BD reduced its full-year outlook amid a hold of new shipments of the pumps — a hold that still remains in place two and a half years later. BD applied for the new FDA clearance in April 2021. Polen has said in recent earnings calls that the company doesn’t expect a clearance during its present fiscal year, which ends Sept. 30.