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Endo/ American Medical Systems Under Investigation for Transvaginal Mesh

AMS logoEndo Health Solutions took over American Medical Systems (AMS) in 2011 for $2.9 billion and in doing do inherited roughly 22,000 transvaginal mesh lawsuits.

That may have been a mistake.

In its annual report released by the Securities and Exchange Commission Monday, Endo says it has received subpoenas from several states investigating its pelvic mesh products. The California Attorney General’s office is one of those states which issued a subpoena last November.

Endo says it is cooperating with the investigation.judge mallet 200

Not only is Endo/ AMS facing 16,534 lawsuits filed in multidistrict litigation in federal court in Charleston, WV (MDL No. 2325) but thousands of product liability actions have been filed in state courts around the country.

The healthcare fraud investigation focuses on whether state health plans (taxpayers) such as Medicare and Medicaid overpaid for the mesh implants. Investigations can include false claims, misbranding, kickbacks, improper marketing, a failure to report, illegal marketing for unapproved uses and billing for unnecessary procedures, among other criminal statutes. See Medi-Cal Fraud page here.

Insurance Coverage

Not surprisingly the litigation has cut into Endo’s profits in its women’s health unit, according to the filing.

Mesh litigation and FDA actions in connection with transvaginal mesh may continue to adversely affect sales of our female incontinence and pelvic floor repair products and the expense or potential liabilities of that litigation may exceed our current insurance coverage.

We may be the subject of product liability claims or product recalls, and we may be unable to obtain or maintain insurance adequate to cover potential liabilities.”

Heads up to investors- you may be on the hook for any settlements that are forthcoming.

Last month the company announced it had put aside $520 million to cover the cost of litigation or settlement.  See back story here.  Endo also recorded a pretax charge off about $316 million at the end of 2013 which brought its product liability fund to about $520 million.

At the time in a filing it said a loss that would surpass that figure could be a “reasonable possibility.”

Last June, Endo agreed to pay $54.5 million to settle an undisclosed number of pelvic mesh-injury claims. See back story here.

Perigee for POP

Perigee for POP

In its SEC filing, Endo Health Solutions Inc. said that an estimated 500 million women worldwide may suffer from urinary or fecal incontinence and around 400,000 surgeries are performed around the world annually to correct some form of pelvic organ floor prolapse.

Endo/AMS products include:

ElevateTM Anterior and Posterior Pelvic Floor Repair System. Our AMS segment offers the Elevate® transvaginal pelvic floor repair system, for the treatment of pelvic organ prolapse, which may be caused by pregnancy, labor, and childbirth. Using an anatomically designed needle and self-fixating tips, Elevate® allows for safe, simple and precise mesh placement through a single vaginal incision, avoiding an external incision. Elevate® revenue accounted for approximately 1% of our total revenues in both 2013 and 2012.

Monarc® Subfascial Hammock. The Monarc® subfascial hammock is our leading device to treat female stress urinary incontinence, which generally results from a weakening of the tissue surrounding the bladder and urethra which can be a result of pregnancy, childbirth and aging. It incorporates unique helical needles to place a self-fixating, sub-fascial hammock through the obturator foramin. Monarc® revenue accounted for approximately 1% of our total revenues in both 2013 and 2012.

Post-Approval Monitoring Ordered

In January, 2012, the Food and Drug Administration (FDA) ordered AMS to conduct post-approval studies on women who had received the pelvic organ prolapse and mini-sling implants to monitor them for complications.  See background story here.

AMS received 19 orders but has honed that down to sixteen “for various commercial reasons” says its filing.

AMS took its Apogee and Perigee pelvic organ transvaginal mesh (TVM) off the market and in doing so it relieved the company of the post-market monitoring.

“AMS is continuing to work with the FDA to comply with these outstanding orders,”says the filing. #

Learn More:

Endo Health Solutions/ American Medical Systems – Principal executive offices at 1400 Atwater Drive, Malvern, Pennsylvania 19355, telephone number: (484) 216-0000).

Breaking News! AMS Alleges “Scheme” to Profit from Transvaginal Mesh Injuries, October 10, 2013

http://meshmedicaldevicenewsdesk.com/latest-in-the-litigation-concerning-mesh-and-medical-devices/breaking-news-ams-alleges-scheme-to-profit-from-transvaginal-mesh-injuries/

AMS Website  www.americanmedicalsystems.com/home.html

AMS makes the Perigee, Elevate and Apogee transvaginal mesh (TVM) used to treat pelvic organ prolapse (POP), a common condition in women following pregnancy, due to weak collagen or as a result of aging. Apogee and Perigee are  no longer for sale in the U.S. according to the AMS website.

AMS also makes the Sparc and Monarc slings to treat urinary incontinence, using a narrow strip or sling to support the urethra. All of the meshes are made from polypropylene, a petroleum-based plastic which is formed into a mesh material.

3 Comments

  1. Doug Kohrs was CEO at AMS during its’ expansion in women’s urogynecological implanted medical devices. He is a serial ‘innovator’ and was CEO at Tornier 9/2008 when my brother’s Tornier elbow replacement failed after just 4 months. This link is a ‘throwback’ to 2003:

    http://phx.corporate-ir.net/phoenix.zhtml?c=122198&p=irol-newsArticle_Print&ID=401045&highlight=

    American Medical Systems’ Innovative Approach to Cure Female Incontinence Soon to Be Available in the United States

    Choices increase for physicians with the addition of the Monarc(TM) subfascial hammock to American Medical Systems’ female incontinence product line

    MINNEAPOLIS, Apr 14, 2003 (BUSINESS WIRE) — American Medical Systems Holdings Inc. (Nasdaq:AMMD) announced today that its Monarc(TM) subfascial hammock has received FDA (U.S. Food and Drug Administration) approval and will be available for commercial release in the United States mid-year. Monarc has been available in several European countries since January.

    Monarc is the fourth in a series of products AMS has developed to treat urinary incontinence in women, joining SPARC(TM), In-Fast(TM) Ultra, and the Artificial Urinary Sphincter to offer a broad set of minimally invasive surgical options. With Monarc, physicians introduce a supportive mesh subfascially during an outpatient procedure that takes just minutes to complete. This unique approach helps avoid critical anatomical structures and may eliminate the need for cystoscopy.

    Douglas W. Kohrs, president and chief executive officer of American Medical Systems, said, “With the addition of Monarc to our product line, American Medical Systems now has the most innovative offering of incontinence products in the world today. We have set the highest standard for minimally invasive procedures by providing one more truly revolutionary approach to treating urinary incontinence in women.”

    Kohrs added that epidemiological studies suggest more than 15 million women in the United States suffer from urinary incontinence. In most cases, he said, many women can be helped with one of several simple surgical procedures, with success rates now approaching 90 percent.

    Among the first U.S. surgeons trained to perform the Monarc subfascial hammock procedure were G. Willy Davila, M.D., and Mark Walters, M.D., both urogynecologists affiliated with The Cleveland Clinic. Dr. Walters first studied the technique with Professor Georges Mellier, M.D., who had experience performing a similar but more complicated procedure to place a permanent, supportive mesh under the urethra. Dr. Mellier proposed using a helical needle to facilitate more consistent placement of the hammock and worked with AMS to perfect the system.

    Dr. Walters heads up the Section of Urogynecology and Reconstructive Pelvic Surgery at The Cleveland Clinic. Dr. Walters said the product was “developed in Europe and they are very excited about it there. I’m looking forward to the response it receives here in the United States. Monarc provides a very unique approach to the problem. It’s a quick procedure, less invasive than most other types of surgery and patients experience very little postoperative pain.”

    Dr. Davila, chairman of the Department of Gynecology at Cleveland Clinic Florida and who has already performed the procedure on a number of patients, added, “The subfascial approach is easy to learn, greatly reduces the risk to the patient and is highly effective. It’s especially good for patients who have a history of previous surgeries or scarring from other urinary procedures.”

    AMS believes that many urologists, gynecologists, and urogynecologists will quickly gain confidence in using Monarc’s proprietary helical needles for precise placement of the suburethral supporting mesh. For physicians who want to perform continence-restoration surgery, Monarc provides a solution that fits the needs of their patients, providing a safe, minimally invasive and comfortable outcome.

    American Medical Systems

    American Medical Systems, headquartered in Minnetonka, Minnesota, is a world leader in medical devices and procedures to cure incontinence, abnormal uterine bleeding, erectile dysfunction (ED) and urinary obstructions caused primarily by benign prostate hyperplasia (BPH) or strictures. Although not life threatening, these disorders can significantly diminish one’s quality of life and profoundly affect social relationships. In recent years the number of people seeking treatment has increased markedly as a result of longer lives, higher quality-of-life expectations and greater awareness of new treatment alternatives. More information about the company and its products can be found at its website http://www.AmericanMedicalSystems.com and in the company’s Annual Report on Form 10-K for 2002.

    Nicole Lipson, 770/971-8507

    nlipson@mindspring.com

    http://www.businesswire.com

  2. November 14, 2012 Mr. Kohrs retired from Tornier ‘abruptly’: he sold his home near Mpls, MN in 8/2013 (note that he is a medical device ‘serial entrepreneur’! )

    http://ryortho.com/breaking/tornier-ceo-retires-abruptly/ TORNIER CEO RETIRES ABRUPTLY

    Walter Eisner • Wed, November 14th, 2012

    It was a surprise retirement.

    Tornier N.V. announced on November 12 that the company’s President and CEO, Doug Kohrs was retiring. David Mowry, the company’s chief operating officer was immediately named interim president and CEO.

    Kohrs was clearly the captain of this ship. Sean Carney, the company’s board chair noted Kohrs’, “leadership and contribution in building the Tornier business over the past six years. Doug was instrumental in bringing Tornier public, leading the recent acquisition of the OrthoHelix business and expanding our international footprint, core capabilities and the innovation pipeline.”

    Why?

    In the world of publicly traded companies, retirements are usually well-orchestrated and telegraphed well ahead of time to keep investors calm. So why didn’t this happen with Kohrs and Tornier?

    BMO Capital Markets analyst Joanne Wuensch wrote that she was not a fan of this announcement, “particularly on the heels of the departure of CFO Carmen L. Diersen in July 2012. We could speculate that the departure is simply a personal decision (and take it at face value), or take the view that after several missteps since its February 2011 IPO, it was time for new senior leadership. What we do not read into this announcement is anything nefarious (the consulting agreement appears to imply that they are departing on reasonably good terms).”

    Bank of America analyst Bob Hopkins said that his conversations with the company suggested that Kohrs did want to retire over the course of the next 12-18 months. However he believes Kohrs departure was probably hastened “due to [Tornier’s] recent well-documented issues and the lack of value creation since the IPO. Importantly, we do not believe any new issues have arisen since last week’s Q3 call, and Mr. Kohrs has signed a six month consulting agreement with [Tornier] to help with the transition, and remains one of the largest shareholders.”

    Kohrs, according to a company SEC filing, will receive $2,500 per month for up to eight hours of consulting services per month and will be compensated at a rate of $300 per hour for any additional hours.

    Mowry and O’Boyle Assume Leadership

    Mowry joined Tornier in July 2011 as chief operating officer. He has 23 years of medical device industry experience in various engineering and management assignments. Prior to Tornier, Mowry served as senior vice president and president of the Neurovascular Division of Covidien plc, and in the same position with ev3 Inc., prior to its acquisition by Covidien. He is a graduate of the United States Military Academy in West Point, New York with a degree in engineering.

    Kevin O’Boyle, the former chief financial officer of NuVasive, Inc. and one of Tornier’s non-executive board members was named interim vice chairman to serve as a liaison between Mowry and the board.

    Wuensch said that while the company clearly has work to do, her thesis is that, with the distribution changes well under way, and the OrthoHelix acquisition filling an important hole in the company’s extremity bag, the current strategy should accelerate the top-line growth rate over the coming quarters.

    While this “unnecessarily awkward transition” creates as much risk as opportunity for the company, Hopkins said he continues to see real long-term value in the franchise. He notes that Kohrs, “leaves behind a strong bench; the Tornier brand remains strong; their markets are healthy; Warburg [owner of 47% of Tornier] has a best in class track record with management changes in their portfolio companies and Tornier remains comfortable with 2012 guidance and with 2013 guidance that calls for a return to double-digit top-line growth by midyear.”

    Kohrs’ Record

    Kohrs was CEO of American Medical Systems Holdings, Inc.from 1995 to 2005 before turning that firm into a publicly-traded company. Prior to that he co-founded Spine-Tech, Inc. which was later acquired by Sulzer Medica A.G.

    According to a July 2012 TwinCities Business article, Kohrs left American Medical in 2006 to become entrepreneur-in-residence at Split Rock Partners. That’s when he convinced a group of investors to buy the French family-owned Tornier. Tornier’s sales have grown from $100 million in revenues in 2006 to $261 million last year. When he took over, Tornier sold 23 products in 15 European countries; today it sells 100 products in 45 countries worldwide, including Japan, China, Australia, and Argentina. Headcount worldwide has jumped from 350 to 800.

    Whether Kohrs stays retired or continues his serial entrepreneurial track record is unknown.

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