California biotech company Valor Medical, 4 executives and a consultant admitted to the Dept. of Justice that they concealed information about their Neucrylate diagnostic assay, hiding toxicity reports that were required as the product was undergoing FDA premarket review.
Valor pled guilty to felony charges of failing to provide required information and was ordered to pay $250,000 at a rate of $50,000 per year, with the 1st payment due last month. The company was also given 5 years’ probation, according to court documents.
Former CEO and current board member H. Clark Adams pled guilty to a misdemeanor version of the same charges, as did regulatory & clinical affairs manager Cathy Bacquet. Both were given 1 year of probation, with Adams ordered to pay a $5,000 fine and Bacquet a $2,500 fine.
Company founder Dr. Charles Kerber and chief scientist Peter Friedman admitted that they’d known that the information was left out of the Neucrylate application and entered into deferred prosecution agreements. Former Valor regulatory consultant Alan Donald, who was also on the company’s board of directors when the application was submitted, pled guilty to failing to submit the toxicity studies as well.
Valor in 2007 launched 2 pre-clinical studies of its Neucrylate liquid embolic system, a product designed to block vascular leaks and wounds and as a filler for aneurysms. The formula is delivered directly to the treatment area , where it hardens in contact with blood or body fluids.
The studies, one a mouse lymphoma assay (MLA) and one a chromosomal assay (CAA), both returned negative results, according to a DoJ report. Results from the CAA study found that Neucrylate was toxic to cells, the DoJ said.
"After Valor sent the samples of Neucrylate to be tested, the lab reported to Alan Donald, a consultant hired by Valor, that all the chromosomes in the CAA test had been destroyed by initial contact with the Neucrylate," according to an official report. "The lab asked if Valor wanted the lab to follow the standard protocol, which called for diluting the samples of Neucrylate and retesting. Rather than follow the standard protocol, Donald told the lab that no further testing should be performed."
Results returned from the MLA study concluded that Neucrylate was mutagenic, affecting the genetic material of a cell and potentially causing increased mutation. In an email circulated among Kerber and Donald, Adams urged his colleagues to "huddle and determine how we overcome this obstacle," saying that he was confident that they’d find a solution, the DoJ reported.
Valor later submitted the Neucrylate product for FDA review, leaving out the results of the MLA and CAA studies over multiple applications, several rounds of information requests and specific inquiries about animal testing. The FDA ultimately rejected Valor’s applications, even though the agency never saw the failed test reports.
One of the hidden trials was uncovered during a 2010 FDA inspection of Valor’s San Diego office. Bacquet told regulators that the company had "inadvertently" left out the required materials, blaming the omission on Donald, who had left company about a year before the application had been filed. Bacquet maintained, at the time, that company leaders were unaware of the failed test until they were turned up by FDA inspectors.
Federal watchdogs executed a search warrant against Valor and discovered the 2nd hidden study, as well as emails circulated among company leaders that "clearly contradicted" Bacquet’s claims that they hadn’t seen the results, the DoJ said.
"Our nation’s system of evaluating medical device safety and effectiveness depends upon the submission of truthful data to the FDA," U.S. Attorney Laura Duffy said in prepared remarks. "When manufacturers like these defendants place their profits above their duty to honestly report the results of product testing, they place the American public’s health and safety in jeopardy. This office will continue to vigorously enforce laws designed to protect the health and safety of our citizens through cases like this."
