The stock price of Vascular Solutions Inc. plunged by nearly one-fourth on Friday, a day after the company and its chief executive were charged criminally with conspiring to sell a varicose-vein treatment device for unapproved uses.
Meanwhile, several firms announced they are considering shareholder class-action lawsuits against the Maple Grove-based company.
The stock, which had moved from a low of $18.97 this year to nearly $31 before Thursday's revelations, closed Friday at $23.74 per share.
Howard Root, the longtime CEO of Vascular Solutions, and the company were indicted by a federal grand jury in Texas for selling unapproved and adulterated medical devices.
Root, 53, disputes the charges as "absurd," and the company has vowed to fight them in court. Root co-founded Vascular Solutions in 1997 and is the single largest individual shareholder with about 430,000 shares.
Friday's stock drop pared Vascular's market cap by more than $100 million. On Thursday, the company said it planned to repurchase up to $20 million worth of its stock.
"We announced it concurrent with our statement about the indictment because we knew that some investors were concerned," Vascular vice president Phil Nalbone said Friday. "Our stock had quite a run [through Thursday] and we imagined we would see a pullback and we wanted to assure investors … that the legal matter would not affect our ongoing business."
Prosecutors say the company marketed the "Vari-Lase" device to seal veins deep in the leg, even though it was approved only to treat superficial blood vessels near the surface of the skin.
The Vari-Lase was supposed to revolutionize varicose-vein treatment and generate major revenue for the company because it eliminated the need for vein surgery.
The device was voluntarily pulled from the market in July after the company settled a lawsuit alleging the same off-label marketing at issue in the new criminal case.
Neal St. Anthony • 612-673-7144
