Merit Medical Announces Agreement in Principle with Department of Justice
July 15 2020 - 9:25AM
Merit Medical Systems, Inc. (NASDAQ: MMSI), a leading
manufacturer and marketer of proprietary disposable devices used in
interventional, diagnostic and therapeutic procedures, particularly
in cardiology, radiology, oncology, critical care and endoscopy,
today announced that it has reached an agreement in principle with
the Department of Justice (“DOJ”) to fully resolve the DOJ’s
investigation of certain marketing and promotional practices, which
has been previously disclosed. Merit currently expects to pay $18
million in connection with the resolution; however, Merit denies
the allegations.
“Given the mounting costs and time demands associated with
the investigation, we believe this resolution is in the best
interests of the business. Merit will continue to focus on our core
mission: to be the most customer-focused company in
healthcare,” said Fred P. Lampropoulos, Merit’s Chairman and Chief
Executive Officer.
Additional details regarding the settlement will be released
after the settlement documents are finalized.
ABOUT MERIT
Founded in 1987, Merit Medical
Systems, Inc. is engaged in the development, manufacture and
distribution of proprietary disposable medical devices used in
interventional, diagnostic and therapeutic procedures, particularly
in cardiology, radiology, oncology, critical care and
endoscopy. Merit serves client hospitals worldwide with a
domestic and international sales force and clinical support team
totaling in excess of 300 individuals. Merit employs
approximately 6,000 people worldwide with facilities in South
Jordan, Utah; Pearland, Texas; Richmond, Virginia; Malvern,
Pennsylvania; Rockland, Massachusetts; Aliso Viejo, California;
Maastricht and Venlo, The Netherlands; Paris, France; Galway,
Ireland; Beijing, China; Tijuana, Mexico; Joinville, Brazil;
Ontario, Canada; Melbourne, Australia; Tokyo, Japan; Reading,
United Kingdom; Johannesburg, South Africa; and Singapore.
FORWARD-LOOKING STATEMENTS
Statements contained in this release which are
not purely historical, including, without limitation, statements
regarding the anticipated resolution of an ongoing investigation
being conducted by the DOJ, are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and are subject to risks and uncertainties such as those described
in Merit’s Annual Report on Form 10-K for the year ended December
31, 2019 (as amended by an Amendment No. 1 to Annual Report on Form
10-K/A, the “Annual Report on Form 10-K”) and subsequent filings
with the Securities and Exchange Commission. Such risks and
uncertainties include inherent risks and uncertainties relating to
risks and uncertainties associated with the COVID-19 pandemic;
risks relating to Merit’s potential inability to successfully
manage growth through acquisitions generally, including the
inability to effectively integrate acquired operations or products
or commercialize technology developed internally or acquired
through completed, proposed or future transactions; negative
changes in economic and industry conditions in the United States or
other countries; expenditures relating to research, development,
testing and regulatory approval or clearance of Merit’s products
and risks that such products may not be developed successfully or
approved for commercial use; governmental scrutiny and regulation
of the medical device industry, including governmental inquiries,
investigations and proceedings involving Merit; litigation and
other judicial proceedings affecting Merit; restrictions on Merit’s
liquidity or business operations resulting from its debt
agreements; infringement of Merit’s technology or the assertion
that Merit’s technology infringes the rights of other parties;
actions of activist shareholders; product recalls and product
liability claims; changes in customer purchasing patterns or the
mix of products Merit sells; risks and uncertainties associated
with Merit’s information technology systems, including the
potential for breaches of security and evolving regulations
regarding privacy and data protection; increases in the prices of
commodity components; the potential of fines, penalties or other
adverse consequences if Merit’s employees or agents violate the
U.S. Foreign Corrupt Practices Act or other laws or regulations;
laws and regulations targeting fraud and abuse in the healthcare
industry; potential for significant adverse changes in governing
regulations, including reforms to the procedures for approval or
clearance of Merit’s products by the U.S. Food & Drug
Administration or comparable regulatory authorities in other
jurisdictions; changes in tax laws and regulations in the United
States or other countries; termination or interruption of
relationships with Merit’s suppliers, or failure of such suppliers
to perform; fluctuations in exchange rates; uncertainties relating
to the LIBOR calculation method and the expected discontinuation of
LIBOR; concentration of a substantial portion of Merit’s revenues
among a few products and procedures; development of new products
and technology that could render Merit’s existing or future
products obsolete; market acceptance of new products; volatility in
the market price of Merit’s common stock; modification or
limitation of governmental or private insurance reimbursement
policies; changes in healthcare policies or markets related to
healthcare reform initiatives; failure to comply with applicable
environmental laws; changes in key personnel; work stoppage or
transportation risks; introduction of products in a timely fashion;
price and product competition; availability of labor and materials;
fluctuations in and obsolescence of inventory; and other factors
referenced in the Annual Report on Form 10-K and other materials
filed with the Securities and Exchange Commission. All subsequent
forward-looking statements attributable to Merit or persons acting
on its behalf are expressly qualified in their entirety by these
cautionary statements. Actual results will likely differ, and may
differ materially, from anticipated results. Financial estimates
are subject to change and are not intended to be relied upon as
predictions of future operating results, and Merit assumes no
obligation to update or disclose revisions to those estimates.
Contact: Fred P. Lampropoulos,
Chairman and Chief Executive Officer
Phone: (801) 253-1600
e-mail: fred@merit.com
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