By Brendan Pierson
(Reuters) – Two former executives of Acclarent Inc, a medical device company bought by Johnson & Johnson in 2010, were convicted on Wednesday by a U.S. jury on charges of promoting a product for an unapproved use.
Former Acclarent Chief Executive William Facteau and former Vice President of Sales Patrick Fabian were found guilty in federal court in Boston of 10 misdemeanor counts of violating the U.S. Food, Drug and Cosmetic Act, federal prosecutors said in a statement. The counts each carry a maximum prison sentence of one year.
The jury acquitted the men of more serious felony counts of wire fraud and conspiracy, finding they did not act with intent to defraud or mislead.
Facteau’s attorney, Reid Weingarten, and Fabian’s attorney, Frank Libby, said in a statement they would move to overturn the convictions.
The verdict came after legal setbacks in recent years for regulators’ attempting to curb the promotion of drugs and devices for unapproved uses, known as off-label marketing.
In an indictment unsealed last April, federal prosecutors said that beginning in 2006 or earlier, Facteau, 47, and Fabian, 49, promoted Acclarent’s Relieva Stratus Microflow Spacer device to deliver steroid medications to patients’ sinuses, though it was only approved by the U.S. Food and Drug Administration for keeping sinuses open.
Prosecutors said Facteau and Fabian had hoped to increase the company’s revenue to make it an attractive acquisition target, and concealed the off-label marketing from potential buyers, including J&J unit Ethicon Inc.
Ethicon bought California-based Acclarent in early 2010 for about $785 million. Facteau and Fabian received compensation worth about $30 million and $4 million, respectively, from the deal, according to the indictment.
Facteau and Fabian stayed with the company until 2011 and told the sales force to sell the device as a way to deliver steroids, even after Ethicon executives told them to stop promoting it at all, according to the indictment.
Facteau is currently CEO of hearing aid company Earlens.
Drug companies have successfully argued in court that some off-label marketing is legal.
In March, a Manhattan federal judge ruled that Amarin Corp could promote its fish oil-based pill Vascepa off-label, finding it had the right under the First Amendment to make non-misleading statements about its products.
In 2012, the 2nd U.S. Circuit Court of Appeals overturned the conviction of a drug salesman for promoting Jazz Pharmaceuticals’ narcolepsy drug Xyrem off-label, also on First Amendment grounds.
The case is USA v. Facteau et al, U.S. District Court, District of Massachusetts, No. 1:15-cr-10076.
(Reporting By Brendan Pierson in New York, Editing by Alexia Garamfalvi and Richard Chang)