Boston Scientific Snared In Litigation Over Acquisitions
By Jof Enriquez,
Follow me on Twitter @jofenriq
Boston Scientific Corporation disclosed recently that it received a subpoena over its purchase of interventional cardiology firm BridgePoint Medical, Inc. in 2012.
The U.S. Attorney for the District of New Jersey served the subpoena on July 11, 2014 seeking information about the deal, including the details of the sale of BridgePoint’s CrossBoss and Stingray line of products, as well as “educational and training activities that relate to those sales,” according to a regulatory filing made by Boston Scientific with the U.S. Securities and Exchange Commission. Boston Scientific said in the statement that the company is cooperating with federal investigators.
BridgePoint Medical is a medtech startup with a proprietary system consisting of the two marquee brands that restore clogged arteries. Specifically, those products treat conditions called coronary chronic total occlusions (CTOs). Boston Scientific acquired the company in October 2012 to boost its own interventional cardiology business, according to Law360. The BridgePoint system allows cardiac bypass patients to go home within 24 hours of the procedure.
In its Form 10-Q filing, Boston Scientific also disclosed that it received a separate subpoena from the U.S. Department of Health and Human Services, Office of the Inspector General, on May 5, 2014, regarding the “launch of the Cognis and Teligen line of devices in 2008, the performance of those devices from 2007 to 2009, and the operation of the Physician Guided Learning Program.”
In relation to the disclosure regarding BridgePoint, Boston Scientific is facing a possible investigation on behalf of company shareholders. The investigation involves “possible violations of federal securities laws and focuses on certain statements issued by Boston Scientific concerning the Company’s business and operations,” according to a press release by the Law Offices of Howard G. Smith.
Boston Scientific is also headed to trial at an unspecified date for its decade-old dispute with Johnson & Johnson. According to the New York Times, Boston Scientific could pay up to one third of its current market capitalization of $17 billion if it loses its case against J&J, unless a settlement is reached.
The NYT reported that the case stems from Boston Scientific’s acquisition of Guidant in 2004. At the time, J&J said that it had a prior merger agreement to buy Guidant. But, Guidant then allegedly shared insider information with Boston Scientific and Abbott Laboratories, resulting in J&J losing the bidding war to Boston Scientific.