DENVER (CN) – Share price tumbled at Spectranetics, a medical device company, after federal agents raided the office in September, executing a warrant for documents about its sales and marketing, post-market studies of its products, and “payments made to medical personnel in connection with those studies,” shareholders say in a federal class action.
Spectranetics makes “the only excimer laser approved in the United States, Europe and Japan for use in minimally invasive cardiovascular procedures,” the complaint states. “The Company’s disposable catheters use high-energy ‘cool’ ultraviolet light to vaporize arterial blockages in the legs and heart, as well as scar tissue encapsulating pacing and defibrillation leads.”
However, the Sept. 4 raid by FDA and Immigration and Customs Enforcement agents apparently targeted other, allied products.
“The Company stated that the search warrant requested information and correspondence relating to the promotion, use, testing, marketing and sales regarding certain of the Company’s products, for payments made to medical personnel and an identified (sic) institution for the Company’s products; for the promotion, use, testing, experimentation, delivery, marketing and sales of catheter guidewires and balloon catheters manufactured by certain third parties outside the United States; for information regarding two post-market studies the Company completed from 2002 to 2005, and for payments made to medical personnel in connection with those studies; and for compensation packages for certain of the company’s personnel.
“Upon the release of this news, the Company’s shares fell $4.27 per share, or 47.44 percent, to close on Sept. 4, 2008, at $4.73 per share, on unusually heavy trading volume,” the complaint states.
Shareholders say the company failed to disclose its “illicit activities,” inflating its share price. Their lead counsel is Kip Shurman of Boulder.