Spectranetics Corporation (NASDAQ GM:SPNC), a medical device manufacturer, was served a joint Federal search warrant on Thursday by the FDA (Food & Drug Administration) and ICE (Immigration & Customs Enforcement), supposedly as part of an investigation into whether Spectranetics improperly received parts from an international source.
In a press release, Spectranetics said that “The search warrant requested information and correspondence relating to: (i) the promotion, use, testing, marketing and sales regarding certain of the company’s products for the treatment of in-stent restenosis, payments made to medical personnel and an identified institution for this application, (ii) the promotion, use, testing, experimentation, delivery, marketing and sales of catheter guidewires and balloon catheters manufactured by certain third parties outside of the United States, (iii) two post-market studies completed during the period from 2002 to 2005 and payments to medical personnel in connection with those studies, and (iv) compensation packages for certain of the company’s personnel.”
Spectranetics (www.Spectranetics.com) is based in Colorado Springs, CO, and employs approximately 470 people. It was founded in 1984 by a physicist with the U.S. Air Force; the physicist and a Hewlett-Packard engineer specializing in imaging work had both been working on lasers for the Strategic Defense Initiative.
Spectranetics manufactures and sells a laser, its primary product that uses very concentrated UV light to treat certain cardiovascular conditions by vaporizing plaque, scar tissue, and other potential blockages. It is the only such laser approved in the United States, Europe, and Japan for use in multiple, minimally invasive cardiovascular procedures. The company uses a direct sales force to target major cardiac catheterization labs and hospitals in the U.S. and Canada, while selling its products in Europe and the Middle East through it Spectranetics International subsidiary.
Spectranetics announced that it was cooperating fully with authorities, and said it expects business operations to continue their ordinary course. NASDAQ halted trading of the stock on Thursday, as the news caused shares of Spectranetics to plunge nearly 50%, from 8.15 to 4.73, before closing on Friday at 5.41.
Let us hear your thoughts below: