A Medical Device Daily
Glancy Binkow & Goldberg (Los Angeles) said it has filed a class action lawsuit in the U.S. District Court for the Northern District of California on behalf of all persons or entities who purchased the securities of Hansen Medical (Mountain View, California) between May 1, 2008 and Oct. 18, 2009.
The complaint charges Hansen and certain of the company's executive officers with violations of federal securities laws. Hansen develops products and technology using robotics for the accurate positioning, manipulation and control of catheters and catheter-based technologies. Its first product, the Sensei Robotic Catheter system, is a robotic navigation system designed to enable clinicians to accurately place mapping catheters in hard-to-reach anatomical locations within the heart during complex cardiac arrhythmia procedures. The complaint alleges that throughout the class period defendants knew or recklessly disregarded that their public statements concerning Hansen's business, operations and prospects were materially false and misleading. Specifically, the defendants made false and/or misleading statements and/or failed to disclose that the company improperly recognized revenue; that, as a result, the company's revenue and financial results were overstated during the class period; that the company's financial results were not prepared in accordance with Generally Accepted Accounting Principles; that the company lacked adequate internal and financial controls; and that, as a result of the above, Hansen's financial statements were materially false and misleading at all relevant times.
On Oct. 19, Hansen shocked investors when it revealed that the audit committee of Hansen's board of directors, upon the recommendation of management, concluded that the company's previously issued financial statements contained in its annual report on Form 10-K for the year ended Dec. 31, 2008, and its quarterly reports on Form 10-Q for the quarters ended March 31, 2008, June 30, 2008, Sept. 30, 2008, March 31, 2009 and June 30, 2009, should no longer be relied upon because of errors arising from "potential irregularities outside of the accounting department." According to the company, Hansen identified systems for which revenue should have been recognized in a later period than the period in which it was recognized, and revenue on systems that should have been reflected as deferred revenue on its balance sheet as of June 30, 2009.
As a result of this news, the price of Hansen shares declined $0.31 a share, more than 9%, to close on Oct. 19 at $3.12 a share, on unusually heavy trading volume, according to the complaint.
In other legalities, Centene (St. Louis) said an agreement has been reached between University Health Plans (UHP; Quincy, Massachusetts) and Amerigroup New Jersey (Edison), resolving the litigation regarding the sale of certain UHP assets to Amerigroup. The parties will move forward with the transaction, which is subject to regulatory approval and expected to be completed during the first quarter of 2010. In conjunction with the agreement, the parties have released the claims associated with the litigation.