Dive Brief:
- Masimo said it received a subpoena from the Department of Justice seeking documents and information related to its Rad-G and Rad-97 pulse oximeters, including complaints about the products and the company’s decision to recall Rad-G devices earlier this year.
- The DOJ also issued a civil investigative demand for information about customer returns of Rad-G and Rad-97 devices, including those involved in the Rad-G recall, according to a June 7 securities filing. The company received the DOJ subpoena in February and the civil investigative demand in March, Masimo said in its first-quarter report.
- In that filing, dated May 7, Masimo also disclosed that it received a subpoena from the Securities and Exchange Commission in March for documents and information related to allegations of potential accounting irregularities and internal control deficiencies.
Dive Insight:
The government probes are the latest challenge facing Masimo management, which is in the midst of a proxy battle with activist investor Politan Capital Management.
Masimo said it is cooperating with the inquiries and investigative demand.
In February, Masimo recalled certain Rad-G portable oximeters because the devices could automatically power off, resulting in a loss of monitoring. The Food and Drug Administration’s recall database entry identified 59 devices in commerce.
However, after the recall came up during a June 5 investor conference, Masimo clarified the total number of Rad-G devices recalled in its June 7 securities filing to show that about 7,350 Rad-G units sold in the U.S. and about 20,250 Rad-G units sold outside the U.S. are subject to the recall.
“The statement that 59 Rad-G units were recalled was a mistake. That figure applies to only one unique part number,” Masimo spokesperson Matt Whewell wrote in an email to MedTech Dive. “The Company continues to cooperate with the FDA and will continue to follow up with consignees on the recall.”
Politan is seeking two additional seats on Masimo’s board, after Politan managing partner Quentin Koffey and Politan nominee Michelle Brennan, a former Johnson & Johnson executive, were elected to the board last year.
Masimo is also working on a plan to split off its consumer audio and consumer health products businesses.
