Abbott (NYSE:ABT) owned Thoratec is seeking approval for a $11.9 million deal to settle class action claims that it and some of its officers hid facts about its Heartmate II heart pump’s thrombosis rate that would have negatively affected share prices, according to recently released court documents.
Investor Bradley Cooper originally brought the suit against the company in January 2014, on behalf of anyone who bought stock between April 29, 2010, and Nov. 27, 2013. Plaintiffs in the case argued that the company failed to warn investors about a blood clot problem with its HeartMate II implant implicated in a Class I recall.
In 2013, the FDA said an improperly connected component in the implant may result in deformation or tearing of the device’s outflow conduit, putting the patient at risk of serious injury or death. A year before that, a study published in the New England Journal of Medicine showed a sharp increase in the rate of blood clots with the HeartMate II LVAD.
The Pleasanton, Calif.-based device maker issued a correction notice in February 2012, warning physicians that a small portion of the HeartMate II devices’ sealed outflow graft bend reliefs, designed to prevent a connector between the pump and the aorta from kinking, were not properly connected.
“Thoratec hid from its investors its own internal data confirming such reports and the related financial risk, and did not correct its prior disclosures. […] Thoratec did not disclose the extent of the impact that the reported increases had on HeartMate II’s commercial viability until August 6, 2014, causing its stock to drop some twenty-five percent,” according to court documents.
The suit was revived in October 2017 by a Ninth Circuit panel which decided it was a mistake that a lower court dismissed the case, and that investors had sufficient grounds for their claims that the company misled them.
The revived case included both Bradley Cooper and Todd Labak as plaintiffs, who both purchased shares in July and August 2013. Plaintiffs in the case were found to meet the appropriate rules for class certification, US District Judge Claudia Wilken ruled last May.
In the new settlement deal, dated February 1, Thoratec agreed to pay $11.9 million to close out the cases, according to court documents.
Abbott acquired Thoratec when it bought St. Jude Medical in 2017. In May of that year, Abbott recalled nearly 29,000 controllers for the HeartMate II implantable heart pump after 26 patients died trying to change out the controllers on their own.