- Ra Medical Systems, which makes laser-based treatments designed to restore blood flow in arteries and clear chronic skin conditions, has filed a lawsuit accusing the chairman of competitor Strata Skin Sciences of trying to derail its initial public offering.
- Ra accused Strata Chairman Uri Geiger of engaging in a campaign of false and disparaging statements against Ra to its financial partners and potential investors. Strata makes a laser treatment targeting psoriasis.
- Strata sued Ra Medical last year in what it tells MedTech Dive is an identical case. Strata claims Ra's latest suit is an attempt to shop for a court that might be friendlier to its tort claims.
In the complaint filed last week in U.S. District Court in the Southern District of California, Ra Medical said the false statements constituted an intentional attempt to interfere with Ra’s contractual and prospective economic relations, and represent trade libel. Ra also alleged the statements are a breach of a non-disparagement provision of a prior settlement agreement to which Strata was bound.
Strata’s actions "appear to be a deliberate attempt to derail Ra Medical’s mission by limiting our access to the capital markets, as well as by harming our brand and reputation," Ra said in a statement. The company said it believes the lawsuit is necessary to protect its interests and its shareholders, customers and patients.
Ra is seeking a declaration that Strata breached the settlement agreement, interfered with contractual and prospective economic relations, and committed trade libel. The company is asking for an unspecified amount of monetary damages.
Ra launched its Dabra system in 2017 for the endovascular treatment of blockages due to lower extremity vascular disease. It launched its Pharos device in 2004 to treat dermatological disorders including psoriasis, vitiligo, and atopic dermatitis.
The Carlsbad, California-based company last year said it raised about $67.6 million from its September 2018 IPO after discounts, commissions and other expenses.
But in a regulatory filing, Strata disclosed it sued last year in a Pennsylvania state court, seeking a ruling that it's not liable to Ra for any reason and for a ruling Strata didn't interfere with Ra's initial public offering. Strata's investor relations contact, Jeremy Feffer, managing director at LifeSci Advisors told MedTech Dive the court has already issued a ruling in the case and called Ra's claims "irrelevant."
Strata makes the Xtrac laser and Vtrac lamp systems used in the treatment of psoriasis, vitiligo and other skin conditions and the Stratapen micropigmentation device. On Friday, the company said it received notice from Nasdaq that it is not in compliance with the market's continued listing requirements because it has not yet filed its quarterly report for the period ended March 31, 2019 or its annual report for the year ended Dec. 31, 2018.
Strata said it was unable to file the 10-Q because it had changed its public accounting firm on May 10, 2019. The company said that the notice has no immediate effect on its stock listing on Nasdaq and that it has until June 3, 2019 to submit a plan showing how it intends to regain compliance. Strata said it intends to submit the compliance plan by the deadline.