Medtronic said Friday that it has agreed to settle a federal securities class action lawsuit that alleged the company misled investors regarding its Infuse bone-growth device.
The settlement is for $85 million, and Medtronic denied in a statement "that it made any misrepresentations or omissions or that it otherwise engaged in any wrongdoing." Company officials were not made available for comment.
The class action was originally filed in federal court in December 2008 against the company and several of its officers. The suit alleged that, between November 2006 and November 2008, the company misled investors about the profitability of its Infuse device, which stimulates bone growth.
The lawsuit claimed that sales of the bone graft were more dependent on applications not approved by the Food and Drug Administration than Medtronic disclosed and that the omissions inflated the company's stock price.
The suit was originally filed by the Minneapolis Firefighters Relief Association, Medtronic said Friday. The proposed settlement is subject to completion of final documentation and court approval.
Medtronic said it expects to record the settlement as a one-time charge in its fourth fiscal quarter ending April 27.
Other plaintiffs in the class included the Oklahoma Teachers' Retirement System, the Oklahoma Firefighters Pension Fund and the Westmoreland County Employee Retirement System.
"Members of the plaintiffs' class are pleased that the matter has been resolved on an amicable basis for the amount of $85 million," said Karl Cambronne, lead attorney for the investors who sued.
Cambronne, of the Minneapolis firm Chestnut Cambronne, credited U.S. Magistrate Judge Arthur Boylan for helping the parties arrive at a settlement.
James Walsh 612-673-7428