Michigan-based orthopedics giant Stryker (NYSE:SYK) offered the U.S. Justice Dept. a $33 million settlement to close the books on a federal investigation of its OtisKnee implants.
The DOJ has yet to evaluate the offer and Stryker noted in regulatory filings that "there can be no assurance that we will reach a consensual resolution, when such a resolution would occur, or what the final terms of any such resolution may be."
Stryker first revealed the probe in its 3rd quarter 2010 earnings release, saying it received a subpoena on "regulatory matters related to the OtisKnee device." No other information was given, but the subpoena "pertains to alleged issues prior to OtisMed acquisition," Piper Jaffray analysts wrote at the time.
Now Stryker says the subpoena " related to the sales and marketing of the OtisKnee device," according to regulatory documents filed yesterday.
"The subpoena concerns allegations of violations of federal laws related to sales of a device not cleared by the U.S. FDA," according to the filing. "We recently entered into discussion with the DOJ regarding the potential settlement of this matter, and on May 31, 2012, we offered $33 million to the DOJ," according to the filing. "During the second quarter of 2012 we will record a non-tax deductible charge of $33 million representing our best estimate of the minimum of the range of probable loss to resolve this matter."
Stryker acquired OtisKnee custom-fitting knee implant technology maker OtisMed Corp. in 2009. The company did not respond to requests for comment yesterday.
