Boston Scientific shares dropped 12.6%, to close at $6.80 after it announced the recall. Boston Scientific is facing more fallout from its recent recall of implantable cardiac defibrillator and implantable cardiac resynchronization therapy defibrillator devices. This time, shareholders have filed suit claiming the company, along with some of its officers and directors, issued materially false and misleading statements regarding its business and prospects prior to the recall.
According to the complaint, Boston Scientific shares dropped 12.6%, to close at $6.80 after it announced the recall on March 15. The lawsuit was filed in United States District Court for the District of Massachusetts on behalf of anyone who purchased Boston Scientific Corporation common stock between April 20, 2009 and March 12, 2010.
As we reported previously, the recall impacted seven brands of Boston Scientific defibrillators: COGNIS®, CONFIENT™, LIVIAN™, PRIZM™, RENEWAL®, TELIGEN® and VITALITY™. All of the devices in the recall were acquired by Boston Scientific in 2006 when it purchased medical device manufacturer Guidant Corp., of St. Paul, Minn., for $28.4 billion.
The company said it initiated the recall because it did not get approval from the Food & Drug Administration (FDA) for changes to its manufacturing processes. According to The Boston Globe, Boston Scientific’s lapse was related to documentation, the paperwork that companies are required to submit to federal regulators whenever they make material changes in their production processes.