Abiomed, a medical device manufacturer based in Danvers, Massachusetts, was served with a lawsuit from shareholders. The lawsuit stems from the company’s misrepresentations of its Impella 2.5 heart pump. According to the lawsuit, Abiomed made overly-optimistic predictions regarding the Impella system in an effort to manipulate share prices.
The lawsuit was filed on November 16th, 2012 in the United States District Court for Massachusetts. The lawsuit names Abiomed, CFO Robert Bowen and CEO Michael Monogue of intentionally misleading investors over FDA warnings regarding the Impella 2.5 device.
In January of 2010, the Food and Drug Administration issued a warning to the company, "informing Abiomed that its promotional and marketing materials were making claims about the Impella 2.5 that were inappropriate and not supported for its intended use." According to the lawsuit from shareholders, Abiomed failed to disclose this information to investors at that time.
The company received another warning from the FDA in June of last year. The second warning letter from the FDA discussed a regulatory review of the company’s website, advertising and product labels. According to the FDA, marketing materials from the company "indicate that Abiomed is making claims that we stated were inappropriate in a January 28, 2010, letter to your firm." Marketing claims were a significant deviation from the approved usage for the Impella system.
According to a press release by the company, "Abiomed plans to vigorously defend itself against the allegations. Abiomed's policy is not to discuss pending litigation.”