A Medical Device Daily

The Securities and Exchange Commission reported that a final judgment by consent was entered by the U.S. District Court of the District of Massachusetts against Thomas Moore, the former CEO of Biopure (Cambridge, Massachusetts) in a previously filed action alleging misleading public statements about the company's efforts to obtain FDA approval for its synthetic blood product, Hemopure.

The judgment against Moore enjoins him from violating antifraud provisions of the federal securities laws and orders him to pay a $120,000 civil penalty.

The complaint, filed Sept. 14, 2005, alleges that, beginning in April 2003, Biopure received negative information from the FDA regarding its efforts to obtain FDA approval of its synthetic blood product Hemopure, but it failed to disclose the information, or falsely described it as positive developments.

The complaint alleges that in April 2003, the FDA placed a clinical hold barring Biopure from conducting clinical trials of Hemopure in trauma settings because of safety concerns and that during the next eight months Moore and other Biopure employees concealed the imposition of the hold while making public statements about Biopure's plans to obtain approval for trauma uses of Hemopure.

In addition, in July 2003 the FDA informed Biopure that it had not approved Biopure's application for use of Hemopure in orthopedic surgery, but instead conveyed serious concerns about whether the materials Biopure had submitted in support of its application were reliable and questioning the safety of Hemopure.

Biopure, however, issued public statements beginning on Aug. 1, 2003, describing the FDA's communication as good news, boosting its stock by more than 20%. Moore and other Biopure employees then continued to make misleading statements until December 2003. During this period, Biopure raised over $35 million from investors.

The complaint further alleges that as the true status of Biopure's efforts to obtain FDA approval became public, through a series of incomplete and misleading disclosures between late October and the end of December 2003, the company's stock price fell almost 66% from its Aug. 1 price (Medical Device Daily, Dec. 30, 2003).

To settle the SEC's charges, Moore consented, without admitting or denying the allegations, to the final judgment.

In other legalities:

• SonoSite (Bothell, Washington), a developer of hand-carried ultrasound systems, reported filing a patent infringement suit against Zonare Medical Systems (Mountain View, California) in the U.S. District Court for the Central District of California Southern Division.

SonoSite alleges that Zonare has infringed its U.S. Patent No. 5,722,412 (the '412 patent) through sales of its z.one ultrasound platform. SonoSite's '412 patent covering a portable ultrasound system. The complaint seeks unspecified monetary damages and a court injunction against future infringement by Zonare.

Kevin Goodwin, SonoSite president/CEO, said, "After thoroughly examining the issues, we were convinced that we had to move aggressively to protect and enforce our intellectual property."

The company said the filing does not alter its 2007 guidance provided on Feb. 15 with the release of its 4Q and 2006 financial results, as estimated expenses associated with the lawsuit were included in the company's forecast.

In other legalities:

• DaVita (El Segundo, California) reported that it has received a request for information from the Office of Inspector General, U.S. Department of Health and Human Services, for records relating to Epogen claims submitted to Medicare.

DaVita said it has been in contact with the U.S. Attorney's Office for the Eastern District of Texas, which has stated this is a civil inquiry related to Epogen claims.

DaVita said it will be producing requested records and that there "appears to be substantial overlap between this issue, and the ongoing review of Epogen utilization and claims being reviewed by the U.S. Attorney's Office for the Eastern District of Missouri."

Epogen utilization was also one of the subjects of the multi-year investigation by the U.S. Attorney's Office for the Eastern District of Pennsylvania, recently closed "without any action being taken against the company," it said.

"We have had consistently outstanding anemia management and mortality outcomes in DVA for several years, and we are as comfortable talking about our practices in this area as we have been in our prior two investigations," said Kent Thiry, chairman/CEO.

DaVita is a provider of dialysis services for patients suffering from chronic kidney failure.