Blood filtration company fined $5.7M, executive charged, for covering up patient deaths

The chief regulatory officer at ExThera Medical has been charged with concealing the deaths of two patients who used its controversial blood filtration device. The indictment comes one month after the U.S. Food and Drug Administration (FDA) warned the company to stop marketing its Seraph 100 blood filters for the purpose of treating cancer patients, as it’s only approved for the treatment of infections.

In an announcement, the U.S. Department of Justice said cancer patients flew to Antigua for treatment, where another company Quadrant Clinical Care was using the systems as a gray market treatment. Two of them died.

Prosecutors allege that ExThera defrauded and misled the FDA by not reporting the fatalities.

In connection with the cover-up, Sanja Ilic, MD, the former chief regulatory officer, was charged and has agreed to plead guilty, the DOJ stated. For failing to file an adverse event report, she faces a maximum of three years in prison, followed by one year of supervised release and a fine of up to $250,000.

A hearing to issue a formal sentence has yet to be scheduled. 

The company, too, has entered into a plea deal with authorities. It will pay $750,000 to the families of the two victims, along with a $5.7 million fine, to resolve criminal allegations associated with not reporting the deaths.

In its statement, the DOJ said the company was cooperative during the agency’s criminal probe.

“The government reached its resolution with ExThera based on several factors, including the nature and seriousness of the offense, and that the company has minimal remaining operations,” the DOJ wrote. “ExThera also did not voluntarily and timely self-disclose the conduct to the DOJ but did receive credit for clearly accepting responsibility for its criminal conduct, fully cooperating with the government’s investigation and timely implementing remedial measures.”

Prosecutors added that the company just secured $10 million in investments when it began its operations in Antigua, made possible by a private equity firm with a stake in ExThera. While this was occurring, Ilic was overseeing the first U.S. clinical study analyzing the safety and efficacy of the Seraph 100 blood filter in treating advanced cancers.

The deaths in Antigua were covered up because they jeopardized not only future investment dollars but also the FDA approval, which was pinned to the success of the clinical trial, the DOJ added.

“Ilic and ExThera potentially stood to lose financially if negative adverse event reports related to the Antigua clinic were filed with the FDA,” it wrote. “Rather than comply with her legal obligation to report the events, Ilic suppressed this critical information to defraud and mislead the FDA.”