CryoLife settles fatal human-tissue suit

KENNESAW, Ga. (AP) – CryoLife Inc. has settled a lawsuit filed by the family of a Minnesota man who died after a knee transplant in which human tissue supplied by the company was used.

The death of Brian Lykins, 23, of Willmar, Minn., stemmed from one of more than two dozen infections traced to CryoLife tissue that led the government to order the company in August to stop distributing its cadaver tissue.

The Food and Drug Administration said CryoLife could not guarantee the grafts were free of fungus or bacteria. In February, CryoLife was cleared to begin processing orthopedic tissue again.

Lykins died in November 2001 after receiving tissue processed by CryoLife.

Terms of the settlement were not disclosed on Monday.

“We signed a confidentiality agreement,” said Dr. Ashley Lee, the company’s chief financial officer.

Lee said CryoLife has $25 million in insurance to cover settlement of product liability lawsuits filed in 2002. He said company officials think that will cover other claims, which number about 20.

Don Keenan, an Atlanta lawyer who represented the Lykins family, disagreed. He called the $25 million “a mere drop in the bucket considering the total amount of outstanding lawsuits.”

Keenan represents plaintiffs in two of those suits.

According to CryoLife’s annual statement to the Securities and Exchange Commission released Thursday, the company reported an 11 percent loss in revenue for 2002, in large part due to the FDA’s restriction on several products. Revenues for the year declined nearly $10 million from $87.7 million in 2001 to $77.8 million. Net losses for 2002 were $27.8 million compared to a net income of $9.2 million in 2001.

CryoLife President and CEO Steven Anderson has said the firm expects 2003 revenue of about $70 million. Company officials expect the downturn from the FDA’s ruling to last at least through the first half of 2003, according to the report.

In September, CryoLife cut 105 of its 384 employees, a savings of about $385,000 per month, according to the annual report.

The company’s stock closed Monday at $6.85, down 30 cents since Friday’s trading.

Posted by Colonnade Archives on Apr 4 2003. Filed under News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry