A Medical Device Daily
SeraCare Life Sciences (Oceanside, California) reported that, following a previously disclosed request from the SEC for a voluntary production of certain documents, the company has received a subpoena from the SEC.
The subpoena calls for the production of the documents that were originally requested, as well as additional documents. The company said it continues to cooperate fully with the SEC in this matter.
Separately, the company reported that it has appointed Cathryn Low as its interim CFO.
Low is a turnaround and workout specialist at Prolman Associates, a firm specializing in business turnarounds and management of Chapter 11 reorganizations. She is expected to serve as interim CFO of SeraCare until a permanent replacement is identified.
In March, the company filed for Chapter 11 bankruptcy protection, shortly after reporting problems in its internal controls and the firing of Chairman Barry Plost, President and CEO Michael Crowley Jr., Secretary Jerry Burdick and CFO Craig Hooson (MDD, March 24, 2006). With that report, it also said that its FY05 guidance was to be withdrawn because of its unreliability, and that its financial statements for the quarters ended Dec. 31, 2004; March 31, 2005; and June 30, 2005, would be restated.
SeraCare is a manufacturer of biological products and services to diagnostic, therapeutic, drug discovery, and research organizations.
The company's offerings include plasma-based therapeutic products, diagnostic products and reagents, cell culture products, specialty plasmas, in vitro stabilizers, and the SeraCare BioBank, a database of medical information and associated blood, plasma, DNA and RNA samples.
In other legalities:
• An investor has sued Merge Technologies (Milwaukee; doing business as Merge Healthcare ), in federal court, accusing the company of securities law violations.
The complaint seeks damages for violations of federal securities laws on behalf of all investors who acquired Merge securities from Aug. 2, 2005 through and including March 16, 2006. Berman DeValerio filed the class action in the U.S. District Court for the Eastern District of Wisconsin, Milwaukee Division.
Merge develops medical imaging and information management software and services for both original equipment manufacturers and the end-user health markets.
According to the complaint, Merge and two individual defendants allegedly violated the federal securities laws by issuing materially false and misleading statements during the class period that artificially inflated the company's stock price.
Specifically, in January 2005, Merge reported an all-stock merger between Merge and Cedara Software (Toronto), completed by June 1, 2005, which Merge represented to the market as highly successful.
The complaint, however, said the defendants schemed to deceive the market during that time by reporting materially overstated revenues; prematurely recognizing revenues; and failing to disclose that the company lacked adequate internal controls. When the defendants' misrepresentations and omissions were gradually disclosed to the investing public, the complaint charges, the company's stock fell, from $24.50 per share at the close of markets Feb. 23 to $15.85 per share on March 17.
New neuroinflammation center formed
The Cleveland Clinic Lerner Research Institute (Cleveland) reported that it is establishing a Neuroinflammation Research Center dedicated to the study of inflammation in neurological diseases. The institute said that more than 30 bench researchers in eight different research groups will initiate the center's work, investigating diseases including multiple sclerosis, muscular dystrophy, Parkinson's disease, hearing loss and stroke, to better understand the role of inflammation.