Law firm probing Sientra board of directors
The law firm of Brodsky & Smith has announced an investigation into the board of directors at Sientra, a breast implant manufacturing firm based in Goleta.
According to a news release from the law firm, the investigation comes after previous litigation.
The complaint alleges that the defendants made false and misleading statements, including failing to disclose that Sientra’s exclusive reliance on Silimed’s Brazilian manufacturing facilities carried significant quality control risks; that the manufacturing processes at the Silimed Rio de Janeiro manufacturing plant were contaminated and that Sientra’s statements regarding quality control and other financial statements were materially false and misleading at all relevant times.
Sientra raised $66 million in capital in a 2015 public offering, selling 3 million new shares, and the stock closed at $20.58 per share on the first day. Then its manufacturer at the time was suspended by European regulators, who said that Silimed’s factory in Rio de Janeiro was contaminated by microscopic particles of silica and cotton.
The company had been accused by angry shareholders of knowing about the forthcoming suspension of Silimed products before it held a nearly simultaneous public offering on Sept. 23, 2015. When the news of the suspension broke, the stock price dropped and closed at $9.70 per share. At its height, the company had 2,000 customers. Now the number is down to 600.
The company settled a class-action lawsuit with stockholders for $1.6 million. Sientra said only one lawsuit remains, filed by Silimed, claiming that Sientra passed some of the technology from its previous breast implant product to its new manufacturer.
Sientra also on March 24 announced that it had entered into a $15 million secured line of credit and a $5 million term loan agreement with Silicon Valley Bank. The agreement provides up to $20 million of capital to the company to be used for general corporate purposes, working capital needs related to inventory as the company prepares for FDA approval of its new manufacturing site, and strategic initiatives.
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