A Medical Device Daily
The SEC has filed a civil injunctive action against Carl Rausch, former vice chairman of the board and senior technology officer of Biopure (Cambridge, Massachusetts), for his role in misleading statements about the company's efforts to obtain FDA approval for its primary product, Hemopure, a synthetic blood product. The action charges Rausch with aiding and abetting materially misleading statements by the company between April and December 2003.
Without admitting or denying the allegations, Rausch consented to the entry of a final judgment enjoining him from violating federal securities laws and ordering him to pay a $40,000 penalty.
The complaint alleges that, beginning in April 2003, Biopure received negative information from the FDA regarding its efforts to obtain agency approval of Hemopure but failed to disclose the information, or falsely described it as positive.
Specifically, the complaint alleges that in April 2003, the FDA placed a clinical hold barring the company from conducting clinical trials of Hemopure on human trauma victims in hospitals because of safety concerns. During the next eight months, the company failed to disclose information concerning a clinical hold while making public statements about its plans to obtain approval for trauma uses. In July 2003 the FDA informed Biopure that it had not approved its application for use of Hemopure in orthopedic surgery because of deficiencies in its application and concerns about its safety and efficacy.
Biopure, however, issued public statements and SEC filings beginning on Aug. 1, 2003, describing the FDA's communication as good news, causing its stock price to increase more than 20%. But the company continued to make misleading statements until December 2003 while raising more than $35 million.
As the true status of Biopure's efforts to obtain FDA approval became public, the company's stock price plummeted nearly 66% from its Aug. 1 price.
According to the complaint, Rausch was aware of the true status of his company's FDA applications, yet reviewed, approved, and, in several instances, signed Biopure's misleading statements.
The SEC previously filed a civil injunctive action on Sept. 14, 2005 against Biopure and three other executives concerning their roles in this matter.
In other court-related news:
• CooperVision (Lake Forest, Illinois), the contact lens unit of The Cooper Companies (Pleasanton, California), said it has filed suit in federal district court in Marshall, Texas, alleging that Ciba Vision 's (Duluth, Georgia) O2Optix contact lenses infringe United States Patent Nos. 6,431,706, 6,923,538, 6,467,903, 6,857,740 and 6,971,746, all of which are assigned to CooperVision.
CooperVision is asserting two families of patents, one relating to innovations that control the edge characteristics of certain types of contact lenses, the other relating to designs for certain types of contact lenses, including certain types of toric lenses to treat astigmatism.
The company also filed suit, on April 11, against Ciba in federal district court in Wilmington, Delaware. In that suit, CooperVision said it seeks a declaration that its Biofinity line of silicone hydrogel contact lenses does not infringe on six Ciba Vision U.S. patents. The Ciba Vision patents generally relate to a type of silicone hydrogel lens, it said.