Update: The 9th Circuit Court of Appeals reversed the lower court's decision in our favor and remanded the case for litigation.
On April 21, 2014 Pomerantz LLP was appointed Lead Counsel. Pomerantz LLP has filed a class action lawsuit against Thoratec Corporation ("Thoratec" or the "Company") and certain of its officers. The class action, filed in United States District Court, Northern District of California, and docketed under 14-cv-00360, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired Thoratec securities between April 29, 2010 and November 27, 2013 both dates inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Thoratec researches, develops, manufactures, and markets medical devices for circulatory support and vascular graft applications. The Company's products include a ventricular assist device, an implantable left ventricular heart assist device, a vascular access graft, and a coronary artery bypass graft. Thoratec also supplies whole-blood coagulation testing equipment.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose that the Company's HeartMate II Left Ventricular Assist Device had significant risk of pump thrombosis, causing numerous fatalities. As a result of the foregoing, the Company's statements were materially false and misleading at all relevant times.
On April 4, 2012, U.S. regulators ordered a recall for the company's HeartMate II heart pumps for a potentially deadly defect. In a regulatory posting by the Food and Drug Administration, the agency stated that the recall "was initiated after Thoratec found that a component of the implanted device, which pumps blood for heart failure patients, may sometimes be improperly attached to the HeartMate II." On the news, Thoratec shares tumbled $1.52 or almost 4.5% to close at $32.83 on April 4, 2012.
On November 27, 2013, after the market closed, The New England Journal of Medicine released a study entitled, "Unexpected Abrupt Increase in Left Ventricular Assist Device Thrombosis" concluding that the "rate of pump thrombosis related to the use of the HeartMate II has been increasing at our centers and is associated with substantial morbidity and mortality." On this news, Thoratec shares declined $2.75 per share or 6.5%, to close at $39.37 per share on November 29, 2013.