St. Jude Medical (NYSE:STJ) said it settled a raft of product liability lawsuits filed over its Riata and Riata ST defibrillator leads and agreed with shareholders to close out a class action lawsuit brought over its 3rd-quarter 2009 results.
Taken together the settlements are worth nearly $64.3 million, including $14.3 million for the Riata cases and $50 million for the shareholders lawsuit, according to a regulatory filing.
St. Jude pulled the silicone-coated Riata and Riata ST leads in 2010 after finding that some of the internal conductors had worn through their insulation, a failure that could result in patients receiving unwanted shocks. In November 2011 the company warned that the Riata leads appeared to fail more frequently than previously reported, leading to a Class I recall from the FDA.
Yesterday the company said it agreed to settle all but 3 of the nearly 1,000 Riata cases it’s facing, without admitting any liability, and said it put aside $15 million during Q4 2014 to cover the deal.
"Patient safety is St. Jude Medical’s highest priority. The company remains dedicated to developing technology and products that save and improve the lives of patients around the world," St. Jude said in a statement. "In the interest of patient safety and continued transparency surrounding data from the company’s silicone-only leads, St. Jude Medical continues to communicate regularly with physicians about long-term performance of implanted Riata leads through a semi-annual product performance report and through www.riatacommunication.com, a dedicated resource for providing the latest information on Riata leads."
St. Jude also said it agreed to pay $50 million to settle a lawsuit filed in March 2010 alleging that it concealed evidence of slowing demand and lower orders for its cardiac rhythm management products before it lowered its guidance after the 3rd quarter of 2009. St. Jude moved to have the suit tossed in 2013, arguing that the plaintiffs "cannot prove the allegations of ‘fraud’ in their complaint."
Yesterday the company said it agreed to settle the class action case, agreeing to a $50 million payment pending preliminary approval by the U.S. District Court for Minnesota, where a hearing is slated for March 12. St. Jude said it recognized probable insurance recoveries of $30 million for case and "intends to pursue collection of additional insurance recoveries from certain of its insurance carriers."
