A Medical Device Daily

Med-tech giant Medtronic (Minneapolis) continues to get probed by federal investigators for alleged payments made to doctors.

The company said in a quarterly filing Tuesday with the Securities and Exchange Commission that it received a letter around Oct. 31 from the U.S. attorney’s office for the Eastern District of Pennsylvania requesting documents relating to its relationship with one of its customers and any “payments or things of value” provided by Medtronic to physicians, physician groups, hospitals, medical practices or other entities relating to the purchase of its cardiac resynchronization therapy devices and heart stents.

Medtronic also said in the SEC filing that it would comply with the investigation.

In September, Sen. Charles Grassley (R-Iowa) sent a letter to Medtronic concerning its payments to orthopedic doctors using spinal repair products made by the company’s Sofamor Danek (Memphis, Tennessee) unit (Medical Device Daily, Sept. 28, 2007).

Overall, those payments appear to have reached $6 million, even after Medtronic made a penalty payment of $40 million last year (MDD, Aug. 2, 2006).

The company also said in the filing Tuesday that it has received two letters from the U.S. Senate Committee on Finance. The first – sent Sept. 20 – requests information about financial ties made between the medical device industry and practicing physicians. The second letter – sent Oct. 16 – questions Medtronic about its decision to suspend distribution of its Sprint Fidelis family of defibrillation leads (MDD, Oct. 16, 2007). The company again noted that it is cooperating with the requests.

Medtronic also reported in the filing that it received a letter from the SEC on Sept. 25 requesting information relating to “any potential violations of the U.S. Foreign Corrupt Practices Act in connection with the sale of medical devices in an unspecified number of foreign countries, including Greece, Poland and Germany.” The letter notes that Medtronic is a significant participant in the medical device industry, and seeks any information concerning certain types of payments made directly or indirectly to government-employed doctors. The company added that “a number of competitors” have also received similar letters. Then, on Nov. 16, Medtronic received a letter from the Department of Justice requesting any information provided to the SEC. The company also said it would cooperate with both requests.

In other legalities:

• CryoCor (San Diego) said it has filed a response to the recent patent infringement lawsuit brought against it by CryoCath Technologies (Montreal), and confirmed that it does not believe that it infringes any valid and enforceable claim. CryoCor’s answer to the suit was filed with the U.S. District Court for the District of Delaware.

“We are very confident in the strength of our intellectual property portfolio and continue to believe that this lawsuit is without merit,” said Ed Brennan, PhD, president/CEO of CryoCor. “We have very carefully evaluated the claims in CryoCath’s complaint and remain confident that we do not infringe any valid and enforceable claims. We will examine our options to leverage CryoCor’s intellectual property position and what is in the best interests of our shareholders.”

CryoCor makes a disposable catheter system based on its cryoablation technology for the minimally invasive treatment of cardiac arrhythmias. The system is designed to treat cardiac arrhythmias through the use of cryoenergy, or extreme cold, to destroy targeted cardiac tissue. It has been approved in Europe for the treatment of atrial fibrillation and atrial flutter since 2002.

• Mass Financial (Hong Kong) reported an update with its lawsuit in the Supreme Court of British Columbia against Elekta (Stockholm, Sweden) for breach of contract and contract interference. In the complaint, Mass seeks injunctive relief and “substantial” damages.

The lawsuit involves the magneto-encephalography (MEG) technologies, an imaging device used for neurological research and diagnostics, of Mass’ subsidiary, VSM Medical.

Elekta and a key employee of Elekta are the named defendants in the case. Both are now represented by Borden Ladner Gervais, a Canadian firm.

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