In a legal salvo that has reverberated through the medical device industry, the law firm Bragar Eagel & Squire, P.C. has filed a class action lawsuit against Integra LifeSciences Holdings Corp. in the United States District Court for the District of New Jersey. The lawsuit, filed on behalf of individuals and entities who purchased Integra securities between March 11, 2019, and May 22, 2023, alleges violations of federal manufacturing regulations governing medical devices, culminating in a product recall and a significant decline in the company’s stock price.
Investors have until November 13, 2023, to apply as lead plaintiffs in this case, which centers on Integra’s alleged breaches of good manufacturing practice requirements for medical devices set forth by federal regulatory bodies.
The trouble for Integra LifeSciences began to surface in October 2018 when the U.S. Food and Drug Administration (FDA) identified violations of good manufacturing practices at Integra’s Boston Facility. The situation escalated when the FDA issued a Notice of Inspectional Observations in November 2018. Despite these warnings, Integra continued to grapple with compliance issues, and in 2019, the company received a warning letter from the FDA for failing to address these violations adequately.
Over the years, the FDA repeatedly warned Integra about non-conformity with good manufacturing practice requirements. Throughout this period, Integra’s leadership assured investors that they were diligently working to rectify the issues.
Integra LifeSciences’ woes took a toll on its stock price. On April 26, 2023, the company revealed a production pause, declining operating margins, and flat revenue growth projections. These disclosures sent shockwaves through the investor community, leading to an 8% drop in Integra’s stock price.
The situation worsened when, on May 23, 2023, Integra issued a recall for all products manufactured at the Boston Facility between March 1, 2018, and May 22, 2023, in response to an FDA inspection initiated earlier that month.
The class action lawsuit alleges that Integra’s executives failed to disclose the full extent of the manufacturing issues, creating a false impression of the company’s financial health. Additionally, defendants touted obtaining FDA approval for SurgiMend, a product used in breast reconstruction, despite the ongoing manufacturing problems.
As investors seek redress through this class action lawsuit, the legal battle is set to intensify, with implications not only for Integra LifeSciences but also for the broader medical device industry. This case serves as a reminder of the critical importance of adherence to regulatory standards in the healthcare sector and the potential consequences for companies that fall short of these standards.
