Breast Implant Maker Sued When Stock Takes Nosedive
Shareholders Claim Sientra Execs Withheld Info About 'Contaminated' Devices
Just days after raising $66 million in a public offering, Goleta-based breast implant manufacturer Sientra is facing multiple class action lawsuits that allege violations of federal securities laws.
On September 23, Sientra sold 3 million new shares for $22 each, according to one of the lawsuits. The same day, the United Kingdom’s Medicines and Healthcare Products Regulatory Agency (MHRA) announced it was suspending the sale of Silimed-brand implants after a safety inspection at one of the company’s manufacturing plants in Brazil revealed that the surfaces of some devices — including silicone breast, pectoral, calf, and facial implants — were “contaminated with particles.” Testicular and penile implants were also affected. The MHRA said it is currently testing product samples to determine any health risks.
The news sent Sientra’s shares plummeting over 52 percent on September 24 to close at $9.70 per share. The lawsuits claim Sientra executives knew of the Silimed contamination issues but hid the information from investors before the public offering. The company’s disclosures around quality control and its financial standing were false and misleading, the filings claim, and investors unfairly suffered.
Founded in 2007, Sientra received federal approval to sell silicone breast implants in 2012, becoming just the third company in the country to do so. Sientra went public in 2014 and raised $77 million.
Sientra representatives did not immediately respond to requests for comment.
The Pacific Coast Business Times reported that Sientra founder and CEO Hani Zeini sent letters to plastic surgeons explaining the MHRA investigation has not affected Silimed certification in the United States.
“Our products are FDA-regulated,” he wrote, according to the Business Times. “Sientra’s breast implants and our other products continue to be marketed and available in the United States and there has been no change to the regulatory status of Sientra’s FDA-approved breast implants.”
“We are confident in the safety of our products, and you can reassure your patients as needed by telling them that there has been no indication that these issues would pose a threat to their safety. In light of this news, we will of course conduct our own review to ensure continued compliance with our own high internal standards.”
