Another BSX Product Recalled; Patent Infringement Action Is Brewing
Colchester, Conn., October 7, 2005 Scott+Scott, LLC represents investors in a securities class action filed first by Scott+Scott in the United States District Court for the District of Massachusetts (Civ. No. 05-cv-11912-JLT) against Boston Scientific Corporation (Boston Scientific). Boston Scientific securities purchasers between March 31, 2003 and August 23, 2005, inclusive (the Class Period) are putative class members.
If you wish to discuss this action or have questions concerning your rights as a class member, please contact Scott+Scott for more information at 800/404-7770 before noon East Coast. Scott+Scott will provide you with case materials, answer all questions regarding your participation and rights and assist you with other services the firm provides. There is no cost or fee to you. Thereafter, you can contact Scott+Scott partner Neil Rothstein at (800/332-2259, ext. 22 or cell 619/251-0887).
The complaint Scott+Scott filed on September 21, 2005 alleges that during the Class Period, Boston Scientific and certain individual defendants violated provisions of the Securities and Exchange Act of 1934, causing its stock to trade at artificially inflated levels. Specifically, the complaint alleges that Boston Scientific provided highly explicit false and misleading assurances of the Companys ability to satisfy FDA regulations governing its medical device product quality, as well as affirmative representations as to the Companys knowledge and expertise regarding design, development, marketing approval and sales of its medical devices. The complaint further alleges over $400 million sold in insider trading.
On August 23, 2005, based on the cumulative impact of three separate FDA Warning Letters, investors learned of defendants broad-based concealment of its broken quality program and the risks the Company faced. As a result, Boston Scientifics stock price dropped 4.5% to $25.92, on volume of 15.8 million shares nearly 43.4% from its Class Period high of $45.81 on April 5, 2004. Yesterday, six weeks after the Class Period, the Companys stock closed even lower, at $23.62. Also on September 23, bizjournals.com reported that John Abele-co-founder of the Company made the Forbes list of 400 richest Americans with a worth of about $3.3 billion, one of 13 in Massachusetts to make the list.
On September 21, 2005, Boston Scientific agreed to pay $750 million to its former partner, Medinol, in a settlement that ended a bitter contract dispute over the sale of heart stents. The agreement dissolved a 10-year relationship between Boston Scientific and Medinol. On September 26, 2005, in was announced that Medinol plans to bring a patent infringement action pursuing future royalties on next-generation Boston Scientific stent products. Its going to cover the Liberte and other products of theirs that we say infringe on our intellectual property said Medinols attorney Rory Millson.
On September 27, the Associated Press reported that Boston Scientific, the maker of the Taxus coated heart stent, suffered a downgrade by Merrill Lynch as more competitors enter the drug-coated stent field.
On September 28, 2005, more unfortunate news surfaced regarding Boston Scientifics medical treatments, specifically, the Companys Acid-Reflux product, Enteryx. According to reports filed with the FDA, patients using the product have suffered serious complications. While the Enteryx device was publicized as one of the companys promising new products, its turned out to be a zero, said Mark Landy to The Boston Globe. Mr. Landy is a medical-device analyst for Susquehanna International Group.
Reuters reported on October 6 that, while Johnson & Johnson and Boston Scientific were the only companies to market drug-stent delivery devices in the U.S., Medtronics was preparing by months end to release the results from its product called the Endeavor. Medtronics would then be the third such company to offer a drug-eluting stent on the market. The stock closed yesterday at $23.60 per share.
Today, a Boston Scientific marketing partner, LifeCell Corp., a processor of human tissue for medical products, said Friday that it is recalling lots of three products that may have been manufactured from organs from an alleged body-snatching ring. LifeCell marketing partners include: Wright Medical Group Inc. for the GraftJacket diabetic foot ulcer treatment, Boston Scientific Corp. for the Repliform tissue regeneration matrix, and BioHorizons for periodontal applications of the AlloDerm soft tissue product.
Other companies said to be customers of Biomedical Tissue Services include Tutogen Medical Inc. and Regeneration Technologies Inc.
The plaintiff is represented by Scott+Scott, LLC, which has significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide. Current cases the firm is litigating and/or investigating include: Mercury Interactive; DHB Industries; Guidant; Halliburton; Diebold; Human Genome Sciences; and Lexmark International Inc., among others.