Robbins Geller Substantially Defeats Medtronic, Inc.’s Motion to Dismiss Scheme Allegations Relating to Key Product
On September 29, 2014, Judge John R. Tunheim of the U.S. District Court for the District of Minnesota denied defendants’ motion to dismiss allegations that Medtronic, Inc. and certain individual defendants engaged in a scheme to mislead investors regarding Medtronic’s financial position, particularly with respect to the safety and efficacy of its product INFUSE.
The Complaint alleges that studies initially demonstrating the safety and efficacy of INFUSE were shown to be inaccurate by new studies published in a medical journal called The Spine Journal in May and June 2011, which revealed that the incidence of adverse events experienced with its use was between ten and fifty times the rates previously published. The Complaint further alleges that Medtronic, together with physician consultants, engaged in a scheme to defraud investors by manipulating the early studies. As a result of the scheme to defraud, Medtronic’s stock traded at artificially inflated prices during the Class Period, but then dropped almost 25% from its high point during the Class Period when the truth was revealed.
The Court also upheld the sufficiency of the Complaint’s allegations that defendant William Hawkins made materially misleading statements regarding Medtronic’s ongoing work with the FDA regarding Amplify when the Company had already received a non-approval letter from the FDA. The Court dismissed the Complaint’s remaining allegations regarding the falsity of other Class Period statements.
Robbins Geller is serving as lead counsel in this case. A copy of the order can be viewed here.