A St. Jude shareholder just filed a lawsuit over its recent defibrillator lead problems. The shareholder class action cites St. Jude’s failure to disclose problems with its leads.
The lawsuit alleges that the device maker never disclosed complete information on problems with St. Jude’s recalled and defective Riata device, as well as older devices, which enabled the manufacturer to reap the benefits of an inflated share price, said Med City News. One unconfirmed report about lead wires breaking free in newer Durata ICD leads, said Med City News, prompted St. Jude’s stock to fall 6%. The plaintiff in this class action, Robert Satow, filed the lawsuit on behalf of other shareholders.
As we’ve written, St. Jude introduced the Durata lead after its previous device, the Riata, was failing. The Riata was removed from the market in 2010 following numerous defect reports and links to high failure rates; reports of the Riata’s conductive ends breaking free and either not delivering shocks at the right time or failing to deliver shocks were received. The exposed ends have also been linked to internal injuries, including lacerations and an inferior housing on the Riata leads was eventually blamed for the large number of reported defects and was ultimately changed to a silicone material known as Optim and released as the Durata lead.
This April, St. Jude Medical stopped sales of two other leads with similar problems, said Med City News. “(St. Jude Medical) failed to disclose the full extent of the problems with its products. First, defendants failed to disclose that the Riata and Riata ST were also associated with short circuits unrelated to the protruding wires … the short circuits were much more dangerous. Second, defendants failed to disclose that two other leads sold by the company, the QuickSite and QuickFlexLeft-Ventricular leads, suffered from the same protruding wires that plagued the Riata and Riata ST,” the complaint alleges.
The complaint noted that, this March, “the New York Times disclosed the results of an analysis performed by an independent researcher, Dr. Robert Hauser, which indicated that the Riata and Riata ST caused short circuits.” The defendants challenge these findings, the complaint states, “thus maintaining the artificial inflation in St. Jude’s stock.” The complaint indicates that this April, St. Jude Medical did acknowledge that “the QuickSite and QuickFlex Left-Ventricular leads also suffered from the same protruding wire defect as the Riata and Riata ST,” which, according to the complaint, led to a discontinuation of those leads, said Med City News.
In fact, we recently wrote that a top cardiologist is of the opinion that a Durata lead failure report is, in fact, credible. We also previously wrote that the U.S. Food & Drug Administration (FDA) received a report of a St. Jude Durata cardiac defibrillator lead wire breaking free of its insulation, a potentially dangerous and life-threatening defect that has led to the demise of the other St. Jude defibrillator lead model.
A six-percent share drop followed St. Jude’s public disclosure of the report. Apparently, the lead conductor became externalized, enabling the defibrillator’s electricity-carrying wire to become exposed through its insulation. The Durata is designed to connect an implanted cardiac defibrillator to the heart and delivers life-saving jolts that either keep a heart beating or regulate heart rhythm.
St. Jude lead safety has been the focus of controversy ever since a respected medical journal published the Hauser article that reviewed St. Jude’s Riata lead. The study’s results linked its Riata leads to more patient deaths than St. Jude first thought and found that it tried to present in-house data on the Riata’s safety. Dr. Hauser, an electrophysiologist at the Minneapolis Heart Institute Foundation, told Reuters that he believes the FDA report is genuine, that industry may have made too much of it, but that, “The impact is probably going to be greater than what this case actually represents.”
“As a result of these disclosures, the closing price of St. Jude’s stock dropped from $43.80 to $38.91 over three trading days, a decline of over 11%. This decrease was a result of the artificial inflation caused by defendants’ misleading statements coming out of the price,” the complaint noted, according to Med City News.