Biomet To Settle Bulk Of Bone Stimulator Lawsuits
Biomet, Inc. (Biomet) has agreed to settle the lawsuits filed by 24 of 27 plaintiffs in the Circuit Court of Putnam County, West Virginia. The lawsuit alleged related to professional negligence by Dr. John King in connection with the implantation of the Ionic Spine Spacer System and SpF and OsteoGen implants produced by its EBI unit.
The memorandum of understanding requires each of the 24 plaintiffs to execute a full release of EBI as a condition to receipt of the confidential settlement payments. The proposed releases contain no admission of wrongdoing by the company or any of its subsidiaries. Seven of the releases require court approval under applicable state law. The settlement does not encompass the three remaining lawsuits relating to Dr. King and EBI’s Ionic Spine Spacer System in which EBI is a named defendant.
As a result of the memorandum of understanding, the company has increased its reserve with respect to the company’s probable and estimated exposure in the cases relating to Dr. King and expects to record a charge to its financial results for the fourth quarter of fiscal 2009 on an estimated after-tax basis of approximately $39 million. Following finalization of the releases and in certain cases as described above, receipt of court approval (if obtained), the company expects to fund any cash settlement payment out of its then available cash
On May 7, 2009, the company received a subpoena from the Attorney General of New Jersey requesting various documents relating to the financial interests and arrangements of physicians conducting clinical trials for or on behalf of the company for which financial forms were submitted to the US Food & Drug Administration. The company is currently in the process of evaluating the scope of the subpoena and its response. According to a news release issued by New Jersey’s Office of The Attorney General, subpoenas have also been issued to other major medical device manufacturing companies seeking similar information.