Medtronic ($MDT) must fork over $85 million to put a massive shareholder class action lawsuit behind it concerning the company's Infuse bone graft material. While admitting no wrongdoing, the Minnesota medical device giant will pay the amount to settle the suit.
The "agreement in principle" comes just two weeks after more shareholders filed a new lawsuit accusing Medtronic of falsely boosting the company's stock price by promoting Infuse's off-label use. That suit remains, according to a Medtronic spokeswoman. But the company's major class action suit regarding Infuse, filed initially in 2008 by the Minneapolis Firefighters Relief Association, has been settled. As Reuters recounts, it alleged that more than 85% of Infuse's sales relied on off-label uses and failed to reveal as much.
We previously told you that Infuse has become a longstanding problem for Medtronic. It has been tied in recent months, for example, to an increased risk of male infertility. And some in the Senate are investigating Medtronic's financial interactions with doctors conducting safety-related clinical trials for Infuse. The U.S. Department of Justice has also eyed the company's off-label marketing practices for Infuse, Reuters reminds us.
Infuse generated $800 million in sales for fiscal 2011, according to the story, but that number has been dropping due to the controversy and federal inquiries. Speculation remains that the company may sell its spine business because of poor financial performance.
Medtronic said it will count the settlement as a one-time charge in its fiscal fourth quarter, which ends April 27.
(Photo of the Infuse bone graft courtesy of Medtronic)
- get the Reuters story
- read Bloomberg's take
- check out the MedCity News account
- here's Medtronic's announcement