St. Jude faces shareholder suit over Durata claims
Over the past few months, St. Jude Medical ($STJ) has sparked the ire of regulators, business partners and analysts. Now we can add shareholders to the list, as a Massachusetts pension firm is suing the devicemaker, claiming that St. Jude knew about safety concerns with Durata but kept them from the public.
St. Jude's stock dropped about 12% last month after the FDA chided the devicemaker for how it tests and manufactures Durata leads, Bloomberg reports, and the Canton, MA-based Norfolk County Retirement System says St. Jude knew about those problems while it trumpeted Durata as free from the flaws that plagued its predecessor, the now-recalled Riata.
The suit demands unspecified monetary damages and seeks to loop in anyone who bought stock in the devicemaker from Oct. 19, 2011, to Nov. 20, 2012.
A St. Jude spokeswoman told Bloomberg that the claims are without merit and that the company will fight the lawsuit.
At this point, whether anything comes of the shareholder suit may be less important than how it reads to the public: St. Jude faces more bad news over Durata. The Minnesota device giant touted the new leads--and their reformulated insulation--as the next generation of safe, reliable defibrillator wires, but it has since faced FDA alarm, questions over the devices' shelf lives and predictions from analysts that Durata could get yanked off the market as soon as next year.
All the while, St. Jude's shares have been dragged up and down along with public opinion, plummeting on the news of the FDA's scolding and gradually climbing northward, helped along by a $1 billion share buyback the company announced late last month.
- read the Bloomberg story