According to the law firm press release, Medtronic is engaged in medical technology. The Company’s INFUSE® Bone Graft (“Infuse”) product, which was approved by the FDA for use in some fusion surgeries in the lower back as well as for some oral and dental uses, became an integral part of Medtronic’s Spinal unit after its introduction in 2002, contributing tremendously to the division’s growth.
The complaint alleges that throughout the Class Period, defendants violated the federal securities laws by disseminating false and misleading statements to the investing public regarding the use of the Infuse product for reduction of pain and complications associated with treating degenerative disc disease. As a result of defendants’ false statements, Medtronic’s stock traded at artificially inflated prices during the Class Period, reaching a high of $43.20 per share on May 18, 2011.
On June 23, 2011, Medtronic issued a press release that stated that the Company had received an inquiry from the U.S. Senate requesting information related to the Infuse product. On June 28, 2011, an entire issue of The Spine Journal was devoted to the Infuse product, including the conflicts of interest by researchers who had performed studies on Infuse and the underappreciated risks and side effects associated with Infuse. On this news, Medtronic’s stock dropped $0.92 per share to close at $38.09 per share on June 29, 2011, a one-day decline of nearly 3% on volume of 10 million shares. Then, on August 3, 2011, Medtronic announced it would publicly release Infuse data for Yale University researchers to conduct a review. Medtronic agreed to pay Yale $2.5 million to assemble a steering committee, hire two research organizations to review studies of the Infuse product and design a database that could be used by outsiders to get access to the information. On this news, Medtronic’s stock price dropped $1.47 per share to close at $32.84 per share on August 4, 2011, a one-day decline of 4% on volume of 11.5 million shares.
According to the complaint, the true facts, which were known by defendants but concealed from the investing public during the Class Period, included that the Company had engaged in a scheme with certain researchers to downplay the risks and side effects associated with Infuse and that once those risks were fully appreciated by surgeons, use of the product would drop significantly.
On September 10, 2013, the Court issued an Order granting the Motion for Consolidation, appointing lead plaintiff, and approving the selection of lead counsel in this case. On November 4, the lead plaintiff filed an amended and consolidated Complaint.
On September 9, 2014, the Court issued an Order granting in part and denying in part defendants' motions to dismiss.