A Medical Device Daily

Angiotech Pharmaceuticals (Toronto) said that the British House of Lords has confirmed the validity of one of its patents for a drug coating on devices to prop open arteries, ending a nine-year European legal battle.

The company said that Britain's highest court had overturned the rulings of the lower courts that claimed the patent issued to Angiotech by the European Patent Office for its paclitaxel stent coating was invalid.

Rival stent maker Conor Medsystems (Menlo Park, California) and four other companies had launched various challenges to the validity of Angiotech's patent.

The Angiotech drug coating inhibits the division of cells and prevents migration, discouraging cells with destructive potential from migrating and accumulating at the injured site.

Both the UK trial court and the UK Court of Appeal had ruled that the patent was invalid based on the data of several publications.

However, the House of Lords ruled against the decisions of the lower courts noting that it "did not agree with the reasoning that the lower courts had used in justifying revocation." Instead it based its argument on an earlier Dutch decision.

"We are pleased that the House of Lords entered final judgment in Angiotech's favor and view this outcome as further proof of the continued strength of our paclitaxel stent patent portfolio throughout the world," Angiotech president /CEO Bill Hunter said in a release.

In other legalities:

• The Securities and Exchange Commission (SEC) has filed a complaint against a stockbroker and the former chief technology officer of purported medical device manufacturer VMT Scientific (Las Vegas).

The complaint alleges that the two defendants pumped VMT stock by issuing false press releases about the company and then the stockbroker sold, or dumped, more than 9.5 million shares for almost $1 million.

The SEC complaint, filed in U.S. District Court in Las Vegas, alleges that in mid-2005, Stephen Roebuck and Daniel Kaiser purportedly took control of VMT, a public shell company under court custodianship, and issued 120 million shares of VMT to Roebuck. Roebuck reportedly transferred the shares immediately to offshore brokerage accounts in the Cayman Islands, Turks and Caicos, and Panama.

The complaint says that between November and December 2005, Roebuck and Kaiser created a web site and issued a series of press releases that falsely touted the company's financial viability and its "breakthrough" product that would help patients with peripheral vascular disease.

As alleged in the complaint, the website and press releases failed to state that the company was under court custodianship, had no operations or revenues, and that Roebuck's stock sales were the company's only funding.

After Roebuck and Kaiser issued the press releases, Roebuck sold 9,539,350 shares, resulting in proceeds of more than $990,000. Roebuck transferred roughly $300,000 to the company, and Kaiser took some $81,491 for himself.

The complaint charges the defendants with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and that Roebuck violated Sections 5(a) and 5(c) of the Securities Act.

Roebuck settled to a permanent injunction, disgorgement and a civil penalty to be determined by the court, and a permanent bar from participating in an offering of penny stock. The SEC is seeking from Kaiser an injunction, disgorgement, civil penalty, a penny stock bar, and a permanent officer and director bar.

• Roy Jacobs & Associates said that it has amended its previously filed class-action lawsuit in U.S. District Court, Western District of Wisconsin, to add an insider trading claim on behalf of purchasers of the common stock of TomoTherapy (Madison, Wisconsin).

On Oct. 10, 2007, the company's secondary share offering of 8.5 million shares became effective at $22.25 per share. None of the proceeds of the offering were received by the company, but its chairman, CEO, president and CFO sold what the law firm termed "a very significant number of shares and together received tens of millions of dollars in proceeds."

The complaint charges TomoTherapy and certain officers of the company with violations of federal securities laws. It is alleged that defendants concealed in the offering and thereafter that a larger percentage of the company's revenue backlog was from entities that had ordered multi-unit Hi-Art X-ray medical treatment systems and could be anticipated to take delivery of the units sequentially throughout 2008 and 2009.

"Thus, contrary to defendants' representations that order backlog would generally be recognized as revenue within 12 months of order placement, this was not the case with respect to the multi-unit orders, which represented an increasingly large percentage of total backlog," said Jacobs & Associates.

• Coherent (Santa Clara, California) said that the SEC has notified the company that its investigation of Coherent's historical stock option-granting practices has been terminated and that it will not recommend any enforcement action.

The company is a developer of photonics-based solutions for commercial and scientific research markets.