Well, this is potentially ominous. Allergan ($AGN) has been slapped with a subpoena from the inspector general of the Department of Health and Human Services regarding the company's Lap-Band obesity treatment device.
The company disclosed the subpoena about its gastric band implant in a recent regulatory filing without revealing any other details. A spokeswoman for the Irvine, CA company, also known for Botox wrinkle treatments, acknowledged to Bloomberg that it received the subpoena but otherwise declined to discuss the matter.
So what is all of this likely about? Bloomberg hits on what may be the reason. Last winter, as the article notes, a study in the journal Archives of Surgery found that nearly half of patients who had a gastric band implant either had no weight loss at all, or had to have the device taken out after 6 years. Over 40% of those patients also experienced long-term complications.
Separately, Consumer Reports recently took aim at implants including the Lap-Band, a device designed to help people loose weight through a silicon band that can tighten around a patient's stomach, reducing how much food the organ can hold in order to help them eat less. Earlier this year, the magazine blasted results the company used to obtain a regulatory O.K. where 25% of 299 enrollees needed their bands taken out after three years. The reason: patients either faced complications or simply didn't shed enough pounds.
Either way, there's plenty at stake here. As Bloomberg reminds us, the product produced more than $203 million in revenue for Allergan in 2011. The company also gained an expanded clearance for the product in February 2011, allowing its use in a broader class of obese patients than its 2001 initial approval called for. Allergan has sold Lap-Band since acquiring its creator, Inamed Corp. in 2006.
- read the Bloomberg story
- here's the SEC filing