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Bard Said to Pay $200 Million to Settle Vaginal-Mesh Cases
Aug 4, 2015 | Bloomberg
By Jef Feeley
C.R. Bard Inc. agreed to pay more than $200 million to resolve at least 3,000 cases by women injured by the company’s vaginal-mesh inserts, five people familiar with the accord said. -
Boston Scientific completes $1.6 billion deal for AMS men's health devices
Aug 4, 2015 | Star Tribune
By Joe Carlson
Boston Scientific Corp. has wrapped up its acquisition of three men’s health devices from Minnetonka-based American Medical Systems, creating a new division expected to bring in sales of nearly $1 billion a year.
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
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Bard Said to Pay $200 Million to Settle Vaginal-Mesh Cases
Aug 4, 2015 | Bloomberg
By Jef Feeley
C.R. Bard Inc. agreed to pay more than $200 million to resolve at least 3,000 cases by women injured by the company’s vaginal-mesh inserts, five people familiar with the accord said.
The settlement resolves about a fifth of the outstanding suits related to the implants, which bolster sagging organs and treat incontinence. For at least five years, women have said the devices shrink once they’re implanted, damaging organs and causing crippling pain.
Under the accord, the women will get about $67,000 per case, according to the people, who asked not to be named because they weren’t authorized to speak publicly. While that tops the $43,000 average payout Bard agreed to in a smaller deal last year, it’s much less than the $2 million a West Virginia jury awarded a woman in 2013.
U.S. District Judge Joseph Goodwin in Charleston, West Virginia, who is overseeing vaginal-mesh cases, has urged Bard to consider large-scale settlements given the risk of owing billions of dollars in jury awards. The company settled the West Virginia case for an undisclosed sum, and in June a Bard lawyer told the court they were making progress toward resolving the cases.
Bard said in court filings its devices are safe and effective. Scott Lowry, a company spokesman, didn’t immediately return an e-mail and phone call seeking comment on the settlements.Verdict Risk
“The Bard folks finally decided to listen to Judge Goodwin and settle before they get hit with a bunch of multimillion-dollar verdicts that could bankrupt the company,” said Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia.
Bard, based in Murray Hill, New Jersey, added $337 million to its $660 million reserve for product-liability cases while acknowledging it had resolved 2,800 cases over “Women’s Health Products,” according to a July 24 filing with the U.S. Securities and Exchange Commission.
“There’s still a quite a lot of liability given they’ve only settled about a third of the cases, but I think the company is well enough financially to not have an issue settling these cases,” Jason Wittes, an analyst with Brean Capital, said in an e-mailed statement.
The company is discussing settlements with lawyers for other women who blame Bard’s mesh for their injuries. “We’ve been talking” but haven’t reached a deal, Joe Rice, a South Carolina-based lawyer, said in an interview.Organ Damage
The U.S. Food and Drug Administration ordered Bard, Johnson & Johnson, Boston Scientific Corp. and other vaginal-mesh makers in 2012 to study rates of organ damage linked to the mesh devices.
The devices are threaded into the vagina to fortify pelvic muscles or treat incontinence. Women contend the devices are poorly designed and contain materials that are unsafe for use in humans. Some require multiple surgeries to remove.
The company began pushing for large-scale settlements this year after hiring Nina Gussak, a Philadelphia-based lawyer with Pepper Hamilton LLP. She’s a products-liability veteran and helped GlaxoSmithKline Plc in 2012 settle claims tied to a diabetes drug. Gussak didn’t immediately return requests for comment.
In May, a Delaware jury ordered Boston Scientific to pay $100 million to a woman who sued. Boston Scientific, which has settled some cases, said its devices are safe. Johnson & Johnson has also settled a handful of cases.
The cases are In re C.R. Bard Inc. Pelvic Repair System Products Liability Litigation, 10-md-02187, U.S. District Court, Southern District of West Virginia (Charleston).
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Boston Scientific completes $1.6 billion deal for AMS men's health devices
Aug 4, 2015 | Star Tribune
By Joe Carlson
Boston Scientific Corp. has wrapped up its acquisition of three men’s health devices from Minnetonka-based American Medical Systems, creating a new division expected to bring in sales of nearly $1 billion a year.
The Massachusetts device company paid $1.6 billion in upfront cash to buy AMS’ devices to treat noncancerous enlarged prostates, erectile dysfunction and urinary incontinence. Boston Scientific will pay another $50 million if the devices hit sales targets in 2016.
It’s not yet clear how the deal will affect the roughly 350 employees who work for AMS in Minnetonka, who join a 1,200-person department in Massachusetts. Boston Scientific already has a strong presence in Minnesota, with 5,000 employees in the Twin Cities whose divisions are responsible for about two-thirds of the company’s sales.
“As we work to figure out the future footprint together, we certainly could make decisions to transition, move or resource work differently, which could result in some reductions or job changes,” Karen Prange, president of the Boston Scientific’s urology and women’s health division, said in an interview. “But we’re obviously very committed to making sure that we make the right decisions first and foremost, so it’s going to take a little time to do that.”
The deal is expected to create savings and sales synergies of $50 million a year by the end of 2018. Boston Scientific is expecting it to add 3 cents of earnings per share next year, and 7 cents per share in 2017. Last year, sales of devices being acquired by Boston Scientific generated adjusted income of about $130 million on $400 million in sales.
Device deal
Boston Scientific takes on three key medical devices in its $1.6 billion acquisition of American Medical Systems’ men’s health business:
• GreenLight Laser Therapy Systems for noncancerous enlargement of the prostate.
• The AMS 800 system for male stress urinary incontinence.
• The AMS 700 inflatable penile prosthesis for erectile dysfunction.
“Urology is a healthy, growing market. The companies together will have … devices to treat 50 percent of all urology surgical procedures,” Prange said.
The seller is Dublin-based pharmaceutical company Endo International, which paid $2.9 billion to buy AMS just four years ago. At the time, Endo said it was hoping to diversify its mix of health care products for urology patients.
Since then, a new executive team at Endo has found it difficult to tie sales of medical devices and drugs together. And recently, thousands of product-liability claims have mounted against AMS’ pelvic surgical mesh devices for women, which Endo has set aside $1.39 billion to resolve. Several state attorneys general have issued subpoenas in a civil investigation.
“The combination of those issues might have been enough for them to throw in the towel on the device side,” stock analyst Tao Levy of Wedbush Securities said of Endo’s decision to sell off its medical-device assets from the AMS deal.
Boston Scientific is not acquiring the AMS women’s health business, which remains for sale under a plan approved by the Endo board of directors in February.
Levy said the three men’s health devices that Boston Scientific is acquiring will fit well with its existing business in treating kidney stones and pelvic-floor disorders in women.
Globally, sales of medical devices to treat urologic and pelvic-health conditions comprise a $4 billion market that is expected to grow between 4 percent and 6 percent annually through 2019, according to market information cited by Boston Scientific in presentations to investors earlier this year.
Boston is counting on solid performance from its expanded urology and pelvic health division to reach its overall company target of 5 percent to 9 percent operational revenue growth in 2016, according to slides filed with the Securities and Exchange Commission.
While Boston Scientific executives plan to make investments in the AMS product portfolio they bought Tuesday, that won’t preclude further acquisitions to expand growth, fitting with the recent high level of interest in mergers in the medical device business overall.
“There are a lot of small technology companies out there continuing to do some innovative things that create value for the health care system, and so we continue to look at opportunities to expand,” Prange said.
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