Shareholder Sues Medtronic Over Statements on Defibrillator Leads

A shareholder alleges in a lawsuit filed Thursday that Medtronic Inc. and its top executives suppressed information about defects in a critical wire lead used with certain heart defibrillators. The suit, filed in U.S. District Court in Minneapolis by investor Stanley Kurzweil, seeks unspecified damages from the Fridley-based medical device giant, and from Chairman Arthur Collins Jr., CEO William Hawkins III and CFO Gary Ellis. Medtronic shares have dropped 18 percent, to $45.99 from $56.33, since Oct. 15, when the U.S. Food and Drug Administration recalled Sprint Fidelis leads, noting that broken leads may cause “inappropriate shocks” in defibrillator patients. That same day, the company said it would stop selling the Fidelis leads and that they may have contributed to the deaths of five patients. The leads are a critical component in implantable cardioverter defibrillators (ICDs), which shock an irregular heartbeat back into rhythm. A spokesman for Medtronic said Thursday that the company was unprepared to comment, because it was still reviewing the lawsuit. Kurzweil is seeking class-action status for those who bought Medtronic stock between June 25 and Oct. 15 this year. During that period, the suit alleges that Medtronic made false and misleading statements about the leads, claiming in a securities filing that the product enjoyed “strong market acceptance.” But by January, Medtronic had received 679 reports of injuries caused by fractures in the leads, the lawsuit claims. In February, the Minneapolis Heart Institute told Medtronic that it would no longer use the leads. SOURCE: Star-Tribune