- Investors in Tendyne Holdings have filed a lawsuit alleging Abbott Laboratories delayed a clinical trial for a mitral heart valve replacement device to avoid making a $50 million milestone payment set out in their merger agreement.
- Tendyne alleges Abbott failed to obtain timely European CE mark certification for the valve device Abbott acquired in its deal to purchase Tendyne. Under the agreement, Tendyne investors would have been entitled to the $50 million payment if the device had received CE mark approval, and 70 patients had undergone a transcatheter mitral valve replacement with the device, by Dec. 31, 2017, according to court documents. A reduced, prorated payment would have been due if the milestones were achieved by June 30.
- In the lawsuit, filed in U.S. district court in Delaware, the investors allege Abbott failed to make “commercially reasonable efforts” to reach the milestones and made decisions that intentionally interfered with their achievement. Tendyne is seeking an amount of compensation to be determined at trial.
Following the success of transcatheter aortic valve replacement (TAVR) therapy, medical device companies are now focusing their efforts on developing minimally invasive procedures for replacing the mitral valve. In addition to Abbott, Edwards LifeSciences and Medtronic are working to bring mitral valve replacement devices to market.
Abbott already sells a device called the MitraClip that is the only FDA-approved minimally invasive option for repairing, rather than replacing, the mitral valve. The healthcare giant bought Tendyne, developer of a minimally invasive mitral valve replacement device, in 2015 to further its efforts in the space.
In the deal, Abbott acquired the equity it did not already own in Tendyne for $225 million, for a total transaction value of $250 million, plus potential future payments tied to regulatory milestones.
In May, Abbott announced promising early results for the Tendyne implant from 100 patients in a European study of the device. The data showed a significant reduction in mitral regurgitation and low mortality rates at 30 days, the company said. It expects to enroll up to 350 patients who are not eligible for open heart surgery in the European study and in the coming months begin enrolling patients in a U.S. pivotal study.
Mitral regurgitation occurs when the valve does not close completely, allowing blood to flow backward and leak into the left atrium. The condition can raise the risk of stroke and heart failure. The transcatheter approach used to implant the Tendyne device replaces the patient’s own valve without the need for open heart surgery.