Insulet (NSDQ:PODD) shareholders have agreed to settle a lawsuit alleging that the device-maker misrepresented the success of its Omnipod Eros roll-out in 2013.
The financial details of the settlement were undisclosed, but it includes $425,000 in attorney fees and an array of corporate compliance enhancements that Insulet plans to adopt.
Shareholders Raqim Walker and Frank Carnazza alleged in a consolidated shareholder derivative suit that Insulet “knowingly disseminated false and misleading statements regarding Insulet’s ability to properly manufacture its Eros products, the acceptance of Eros amongst its customers and the number of Eros products it was selling,” according to court documents.
A number of Insulet executives were named in the suit, including ex-CEO Duane DeSisto and chairman & CEO Patrick Sullivan.
In earlier filings, Carnazza described a slew of problems with the company’s Eros device, including needle mechanism failures, leaking pods and defective alarms. In mid-2015, Insulet revealed that the FDA had issued a warning letter over some of its Eros devices, which had been manufactured in a facility that did not meet current good manufacturing practice requirements.
By the end of August that year, Insulet had recalled more than 40,000 boxes of its OmniPod Eros products manufactured between the second half of 2013 and 2015.
Insulet’s settlement with Carnazza and Walker includes several suggestions to enhance corporate compliance, such as a post-market surveillance remediation plan for patient complaints and an annual compliance week that will offer 70 classroom training nodules on QA/RA compliance.
This isn’t the first time Insulet has reached a settlement in reference to its Omnipod Eros roll-out. In February, the company agreed to fork over $19.5 million to settle a class-action lawsuit brought by the Arkansas Teacher Retirement System, the City of Bristol Pension Fund and the City of Omaha Police and Fire Retirement System.
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