Integra LifeSciences Faces Securities Class Action Lawsuit Over Manufacturing Violations
Integra LifeSciences Holdings Corporation (NASDAQ: IART) is currently facing a federal securities class action lawsuit, as announced by leading national securities law firm Faruqi & Faruqi, LLP. The investigation focuses on potential claims against Integra for violations of federal manufacturing regulations governing medical devices, which aim to safeguard patients from infections and other complications.
The allegations stem from a series of violations discovered by the U.S. Food and Drug Administration (FDA) during an inspection of Integra’s Boston Facility in October 2018. The FDA found that the company had failed to meet the good manufacturing practice requirements, particularly in adequately testing for bacterial endotoxins in medical devices manufactured at the facility. Subsequently, Integra received a warning letter from the FDA in March 2019, highlighting the company’s failure to rectify the violations.
Despite these warnings, Integra assured investors throughout the Class Period that they were actively working with the FDA to address the manufacturing issues. The company even expressed confidence in obtaining FDA approval for SurgiMend, a product used in implant-based breast reconstruction, which presented a significant growth opportunity for Integra.
However, on April 26, 2023, Integra disclosed a production pause at the Boston Facility, along with declining operating margins and flat revenue growth projections. The company attributed these setbacks to the manufacturing stoppage. Later that day, Integra revealed that the FDA had initiated another inspection at the facility, which was expected to result in further documentation of manufacturing failures.
The situation escalated on May 23, 2023, when Integra announced a voluntary recall of all products manufactured at the Boston Facility between March 1, 2018, and May 22, 2023. The recall was prompted by the company’s determination that the facility had deviated from good manufacturing practices, allowing the release of products with elevated levels of bacterial endotoxins. The recall affected SurgiMend, PriMatrix, Revize, and TissueMend products.
As a result of the recall and manufacturing shutdown, Integra revised its guidance for the second quarter of 2023, lowering revenue expectations by 6% and adjusted earnings per diluted share by 26%. The company also anticipated a $22 million impairment charge due to inventory write-offs.
While the securities class action lawsuit against Integra is ongoing, it is important to note that the court-appointed lead plaintiff will represent the interests of the class seeking relief. Faruqi & Faruqi, LLP encourages any individual with information regarding Integra’s conduct, including whistleblowers, former employees, shareholders, and others, to come forward and contact the firm.
Integra LifeSciences Holdings Corporation is a leading medical technology company that focuses on developing innovative solutions to improve patient outcomes. Despite the current legal challenges, Integra remains committed to its mission of advancing healthcare through its cutting-edge products and dedication to quality.