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8-K - FORM 8-K - WRIGHT MEDICAL GROUP INC | g28091e8vk.htm |
EX-10.2 - EX-10.2 - WRIGHT MEDICAL GROUP INC | g28091exv10w2.htm |
EX-10.1 - EX-10.1 - WRIGHT MEDICAL GROUP INC | g28091exv10w1.htm |
EXHIBIT
99.1
FOR IMMEDIATE RELEASE Thursday, September 15, 2011 |
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Contact: Lance Berry | ||
(901) 867-4607 |
Wright Medical Group, Inc. Reaches Agreements
with U.S. Attorneys Office and OIG
with U.S. Attorneys Office and OIG
Company Voluntarily Extends Term of Deferred Prosecution Agreement for 12 Months
ARLINGTON, TN September 15, 2011 Wright Medical Group, Inc. (NASDAQ: WMGI), a global
orthopaedic medical device company and a leading provider of surgical solutions for the foot and
ankle market, today announced that its wholly-owned subsidiary, Wright Medical Technology, Inc.
(WMT), has reached agreements with the United States Attorneys Office for the District of New
Jersey (USAO) and the Office of the Inspector General, U.S. Department of Health and Human Services
(OIG) in connection with the previously disclosed May 5, 2011 letter from the USAO regarding the
Companys Deferred Prosecution Agreement (DPA). The May 5 letter was described in the Companys
Current Report on Form 8-K filed May 5, 2011.
Under its agreement with the USAO, WMT has voluntarily agreed to extend the term of its DPA for 12
months; the DPA will now expire on September 29, 2012. The USAO has agreed not to take any
additional action regarding any breach of the DPA referenced in the aforementioned May 5, 2011
letter from the USAO unless it finds, prior to September 29, 2012, that WMT has committed a
knowing, willful and uncured breach of a material provision of the DPA by its conduct after
September 15, 2011 or by conduct before September 15, 2011 of which the independent monitor was not
aware on that date. WMT also agreed with the OIG to an amendment to the Corporate Integrity
Agreement (CIA) under which certain of WMTs substantive obligations under the CIA will now begin
on September 29, 2012, when the amended DPA monitoring period expires. The term of the CIA has not
changed, and will expire as previously provided on September 29, 2015. In connection with such
amendment, the OIG has informed WMT that it has no present intention, based on the information now
known to it, to exercise its authority under Paragraph 51 of the DPA to exclude Wright from
participation in federal healthcare programs based on any breach referenced in the May 5 letter
unless the USAO were to take further action related to an alleged breach of the DPA by WMT.
Wright Medical and our Board of Directors have taken significant steps to enhance the Companys
compliance, said David D. Stevens, Chairman of the Board and interim Chief Executive Officer. We
believe that voluntarily extending the term of the DPA will provide the Company with an opportunity
to further demonstrate its commitment to the highest standards of
ethical conduct. We will continue to work closely with the Monitor, the USAO, the OIG and other
regulators to ensure that the Company complies with all laws and regulations that govern our
business practices.
As a direct result of the federal
monitorship, Wright has made significant and wide-ranging changes in corporate culture and tone at the top,
First Assistant U.S. Attorney J. Gilmore Childers said.
Our Office is pleased with the extensive cooperation from the newly
appointed interim senior management team. Todays extension will
allow Wright to make the transition from interim to permanent senior management while still under the terms of the DPA and the surveillance of the federal monitor.
The DPA Addendum and the CIA Amendment are attached as Exhibits 10.1 and 10.2, respectively, to the
Companys Current Report on Form 8-K filed simultaneously with this press release.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements as defined under U.S. federal securities
laws, including statements regarding potential actions by the USAO, independent monitor, OIG and
other agencies or their potential impact. These statements reflect managements current knowledge,
assumptions, beliefs, estimates, and expectations and express managements current views of future
performance, results, and trends and may be identified by their use of terms such as anticipate,
believe, could, estimate, expect, intend, may, plan, predict, project, will, and other similar
terms. Forward-looking statements are subject to a number of risks and uncertainties that could
cause our actual results to materially differ from those described in the forward-looking
statements. The reader should not place undue reliance on forward-looking statements. Such
statements are made as of the date of this press release, and we undertake no obligation to update
such statements after this date. Risks and uncertainties that could cause our actual results to
materially differ from those described in forward-looking statements include those discussed in our
filings with the Securities and Exchange Commission (including those described in Item 1A of our
Annual Report on Form 10-K for the year ended December 31, 2010, and our subsequently filed
quarterly reports, under the heading Risk Factors and elsewhere), future actions of the FDA or
any other regulatory body or government authority that could delay, limit or suspend product
development, manufacturing or sale or result in seizures, injunctions, monetary sanctions or
criminal or civil liabilities, the impact of any such future actions
of the FDA or any other regulatory body or government authority on our settlement of the federal
investigation into our consulting arrangements with orthopaedic surgeons relating to our hip and
knee products in the United States, and the impact of such settlement of the federal investigation into
our consulting arrangements with orthopaedic surgeons relating to our hip and knee products in the
United States, including our compliance
with the Deferred Prosecution Agreement through September 2012 and the Corporate Integrity
Agreement through September 2015. Our failure to comply with the Deferred Prosecution Agreement or
the Corporate Integrity Agreement could expose us to significant liability including, but not
limited to, exclusion from federal healthcare program participation, including Medicaid and
Medicare, which would have a material adverse effect on our financial condition, results of
operations and cash flows, potential prosecution, including under the previously-filed criminal
complaint, civil and criminal fines or penalties, and additional litigation cost and expense.
In addition, a breach of the DPA or the CIA could result in an event of default under the
Senior Credit Facility, which in turn could result in an event of default under the Indenture.
Additional risks and uncertainties that could cause our actual results to materially differ from
those described in forward-looking statements include the possibility of litigation brought by
shareholders, including private securities litigation and shareholder derivative suits, which if
initiated, could divert managements attention, harm our business and/or reputation and result in
significant liabilities; demand for and market acceptance of our new and existing products; future
actions of governmental authorities and other third parties; tax measures; business development and
growth opportunities; product quality or patient safety issues; products liability claims;
enforcement of our intellectual property rights; the geographic and product mix impact on our
sales; retention of sales representatives and independent distributors; inventory reductions or
fluctuations in buying patterns by wholesalers or distributors; ability to realize the anticipated
benefits of restructuring initiatives; and impact of the commercial and credit environment on us
and our customers and suppliers.
Wright Medical Group, Inc. is a global orthopaedic medical device company specializing in the
design, manufacture and marketing of devices and biologic products for the extremity, hip and knee
repair and reconstruction. Wright Medical is a leading provider of surgical solutions for the foot
and ankle market. Wright Medical has been in business for more than 60 years and markets its
products in over 60 countries worldwide. For more information about Wright Medical, visit its
website at www.wmt.com.
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