June 23, 2009 / 11:08 PM / 10 years ago

Medtronic subpoenaed on bogus US Army surgeon study

* Receives subpoena from U.S. Attorney for Massachusetts

* Says will comply with subpoena

* Shares down 37 cents after hours

By Bill Berkrot

NEW YORK, June 23 (Reuters) - U.S. prosecutors have subpoenaed medical device maker Medtronic Inc (MDT.N) seeking documents related to a study by a former U.S. Army surgeon, who is accused of fabricating data about an important Medtronic spine product.

The company, in a U.S. securities filing, revealed that it received the subpoena last month from the United States Attorney’s Office for the District of Massachusetts seeking documents about the study published in 2008 in the British volume of the Journal of Bone & Joint Surgery.

Prosecutors are also seeking information about “contracts, research grants, speaking and education programs, and payments for certain named physicians.”

Medtronic said it will comply with the terms of the subpoena, but declined any further comment.

The New Jersey Attorney General also subpoenaed the company last week seeking documents related to clinical studies, its financial arrangements with certain physicians, and clinical research done by certain physicians and health care providers, Medtronic said in a filing.

A company spokeswoman refused to say whether the two probes were related.

Medtronic earlier this month confirmed that it paid about $800,000 in consulting fees since 2001 to Dr. Timothy Kuklo, a former U.S. Army surgeon accused of fabricating the published study that claimed positive results for Medtronic’s bone morphogenic protein called Infuse, which induces the formation of bone.

The Army accused Kuklo of falsifying the research. The Journal that published the study retracted the article earlier this year.

The Army is investigating the propriety of the payments by Medtronic to Kuklo for consulting, travel and educational activities on behalf of the company while he was employed by the Army, according to a report in The New York Times.

Medtronic spokeswoman Marybeth Thorsgaard said last week that the payments to Kuklo were not connected to the bogus study and that Medtronic was not involved in any way with the fabricated report. She said none of the data in Kuklo’s study was used to win regulatory approval for the Infuse product.

Shares of Minneapolis-based Medtronic fell to $33 in extended trade after closing up 18 cents at $33.37 on the New York Stock Exchange. (Reporting by Bill Berkrot, editing by Leslie Gevirtz)

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