SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 5, 2002
CRYOLIFE, INC.
(Exact name of registrant as specified in its charter)
Florida
(State or other jurisdiction of incorporation)
1-13165 59-2417093
(Commission File Number) (IRS Employer Identification No.)
1655 Roberts Boulevard N.W., Kennesaw, Georgia 30144
----------------------------------------------------
(Address of principal executive offices, including zip code)
(770) 419-3355
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
On September 5, 2002, CryoLife, Inc. reached an agreement with the U.S.
Food and Drug Administration ("FDA") modifying the FDA's August 13, 2002 Order
for Retention, Recall, and/or Destruction. The agreement permits the company to
immediately resume processing and limited distribution of its life-saving and
limb-saving non-valved cardiac and vascular tissues. It allows CryoLife to
distribute existing and newly processed non-valved cardiac conduits and patches,
saphenous veins, femoral veins and arteries, and aorto-iliac arteries for
specified medically urgent uses when alternative treatments have been exhausted
or are unavailable. The Company estimates that most of the covered tissue under
its control is used by surgeons under the conditions permitted by the agreement.
More information about the agreement is contained in CryoLife's press release
dated September 6, 2002, which is incorporated by reference herein and attached
as Exhibit 99.1. A copy of the agreement is attached hereto as Exhibit 10.38.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit Number Description
-------------- -----------
10.38 September 5, 2002 Letter Agreement between
CryoLife and FDA permitting limited distribution
of certain tissues subject to August 13, 2002 FDA
Order
99.1 September 6, 2002 Press Release regarding Letter
Agreement with FDA
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, CryoLife
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
CRYOLIFE, INC.
Date: September 6, 2002 By: /s/ D. Ashley Lee
--------------------------------
Name: D. Ashley Lee
Title: Vice President,
Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
10.38 September 5, 2002 Letter Agreement between
CryoLife and FDA permitting limited distribution
of certain tissues subject to August 13, 2002 FDA
Order
99.1 September 6, 2002 Press Release regarding Letter
Agreement with FDA
1506088v1
EXHIBIT 10.38
[FDA letterhead]
Steven G. Anderson
President and CEO
CryoLife, Inc.
1655 Roberts Blvd., NW
Kennesaw, GA 30144
Dear Mr. Anderson:
This letter sets forth the entire agreement between CryoLife, Inc. (CryoLife),
and the Food and Drug Administration (FDA) pertaining to the disposition of
certain human allograft tissues, which are subject to the August 13, 2002, FDA
Order for Retention, Recall, and/or Destruction. FDA and CryoLife agree that for
the next 45 working days the tissues specified below may be distributed for
medically urgent use when all alternative treatments have been exhausted or are
unavailable and the conditions specified below have been fulfilled. FDA and
CryoLife agree that only the following human allograft tissues will be
distributed for the specified medically urgent uses when alternative therapies
are exhausted or unavailable:
o Non-valved cardiac conduits and patches procured from the ascending
aorta and pulmonary trunk and branch for use in neonates and pediatric
patients.
o Saphenous veins used for peripheral vascular bypass when no
alternative materials are available.
o Femoral veins and arteries used for dialysis access when synthetic
access device becomes infected and when external bridging is not
possible.
o Aorto-iliac artery for infected abdominal grafts:
o femoral veins and arteries for iliac extension.
o Saphenous veins used for cardiac bypass when no suitable autologous
tissue is available, including internal mammary, saphenous and other
sites.
CryoLife and FDA agree that the specified tissues will be released for
distribution only after CryoLife completes the following steps:
1. CryoLife will obtain a prescription from the surgeon for the tissue
requested, including its specific use. The prescription will include the
surgeon's tissue requirements for the patient. CryoLife will obtain from
the surgeon a written certification that all other alternatives have been
exhausted or are unavailable and that there is an urgent medical need for
the tissue requested. For non-valved cardiac conduits and patches, CryoLife
will obtain from each pediatric surgical center, in addition to the
information described above, a request for the number of tissues that the
center estimates it may use during the 45 day period for which this
agreement is in effect.
2. CryoLife will inform surgeons that patients should be notified that the
tissue is subject to an FDA recall, that there is a risk of infection
associated with these tissue implants, and that alternative approaches,
including non-surgical, should be exhausted or unavailable before using
this tissue. CryoLife will obtain from the surgeon either a written
acknowledgement that he has or will inform the patient of the above factors
or, if this is contained in the informed consent, a copy of that document.
CryoLife will also request immediate feedback from surgeons of any
suspected infections after use of the tissue.
3. CryoLife will contact Tissue and Organ Procurement Organizations (TOPOs or
OPOs) or other facilities that procured the tissues described above to
ascertain if microbial cultures were performed during or after procurement;
if cultures were performed, CryoLife will obtain documentation of the
results of that testing. Any tissues shown by these tests to have been
obtained from a donor whose tissue has cultured positive for microorganisms
that have been associated with infection, or could be indicative of other
microorganisms that have been associated with infections, including but not
limited to, Clostridium, Candida and Escherichia coli (hereafter referred
to as indicator organisms), will not be released. If there are no microbial
records available from the procurement site, CryoLife will include
additional labeling as described in paragraph number 6 below.
4. CryoLife will perform a retrospective review of its own pre-packaging
microbiological testing records for all associated donor tissue. If
indicator microorganisms were isolated, the tissue will not be released.
5. CryoLife will perform a search of its complaint files to ascertain if there
are any complaints regarding infections for all associated donor tissue. If
there are any such complaints with regard to any associated donor tissue,
no tissue from the same donor will be released.
6. CryoLife will provide the following information in addition to its routine
labeling for tissue for distribution: in bold, red caps, in at least
12-point, " BIOHAZARD: THIS TISSUE IS SUBJECT TO AN FDA ORDER FOR RECALL
AND RETENTION BASED ON FDA CONCERNS OVER THE VALIDATION OF THE METHODS USED
TO PREVENT INFECTIOUS DISEASE CONTAMINATION AND CROSS-CONTAMINATION. IT IS
BEING RELEASED DUE TO URGENT MEDICAL NEED AND IS ONLY FOR USE FOR THE
INTENDED RECIPIENT."
For tissue not tested at procurement, CryoLife will further label the
tissue as, "PROCUREMENT CULTURES WERE NOT PERFORMED PRIOR TO RECEIPT AND
PROCESSING BY CRYOLIFE."
7. CryoLife will document and maintain records of its actions under this
agreement, and make such records available for FDA review. For non-valved
cardiac conduits and patches, CryoLife will also track and document all
tissue that is released pursuant to this agreement.
In addition, CryoLife agrees to implement the following interim procedures to
help prevent infectious disease contamination or cross-contamination of tissue
during processing:
1. CryoLife will perform pre-processing cultures on all incoming tissues prior
to antibiotics, disinfectants, or sterilizing agents that would include
either 100% swabbing or 10% destructive testing. All testing of
pre-processing samples will be performed by a contract laboratory with
validated methods, until such time as CryoLife's test methods are
adequately validated. Tissues contaminated with indicator microorganisms
that cannot be reliably cleared by CryoLife's processing system will be
discarded.
2. CryoLife will perform pre-packaging cultures on all tissue made available
for distribution, using either 100% swabbing or 10% destructive sterility
testing. All testing of pre-packaging samples will be performed by a
contract laboratory with validated methods, until such time as CryoLife's
test methods are adequately validated. All tissue from a donor will be
discarded if indicator microorganisms are found in any tissue from that
donor. In lieu of 100% swabbing or 10% destructive sterility testing,
CryoLife will demonstrate that the current practice of processing companion
tissue for the purpose of pre-packaging cultures adequately represents the
tissue being processed through validation of this process.
3. CryoLife will establish a corrective action plan within 30 days that will
include steps to validate its processing procedures to prevent infectious
disease contamination and cross-contamination of tissue during processing,
including any procedures to ensure that tissue distributed by CryoLife is
free, or reasonably free, from microbial contamination. This corrective
action plan will include specific and prompt timeframes for completion of
each step. CryoLife agrees to engage a consultant/third party reviewer to
assist CryoLife in this validation.
4. CryoLife agrees to replace tissue subject to the FDA Order and specified in
this agreement with tissue that has been processed using the interim
procedures above as soon as such tissue is available. As such newly
processed tissue becomes available, CryoLife agrees not to release tissue
subject to the Order and this agreement pending further arrangements for
ensuring the proper disposition of such tissues. Any further arrangements
must be agreed upon in writing between CryoLife and an authorized official
of the FDA.
This agreement will remain in effect for forty-five (45) working days from the
date of signature by all parties. FDA will review records and other relevant
information related to CryoLife's release of tissue under this agreement, as
well as the status of CryoLife's corrective action plan, before determining
whether this agreement should be renewed or modified to provide for any further
release of tissue subject to the Order of Retention, Recall, and/or Destruction.
FDA has encouraged CryoLife, and CryoLife has agreed, to implement adequate
corrective actions as rapidly as possible and to replace tissue subject to the
Order with tissue processed subsequently under the interim procedures. This
agreement supplements the August 13, 2002, FDA Order for Retention, Recall,
and/or Destruction and, except to the limited extent provided herein, does not
in any way supercede, limit, or modify that Order.
/s/ Barbara A. Wood 9/5/02
- ---------------------------------------------------- ------------------
Barbara A. Wood Date
Acting Director
Atlanta District Office
/s/ Steven G. Andersen 9/5/02
- ---------------------------------------------------- ------------------
Steven G. Anderson Date
President and CEO CryoLife, Inc.
1506139v1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS:
D. ASHLEY LEE
VICE PRESIDENT, CHIEF FINANCIAL OFFICER
(800) 438-8285
JOHN DEAVER
SENIOR VICE PRESIDENT, FLEISHMAN HILLARD
(404) 739-0111
CRYOLIFE REACHES AGREEMENT WITH FDA TO RESUME LIMITED TISSUE
PROCESSING AND DISTRIBUTION
ATLANTA...September 6, 2002 CryoLife Inc. (NYSE: CRY), a tissue processing and
medical device company, reached an agreement with the U. S. Food and Drug
Administration permitting the company to immediately resume processing and
limited distribution of its life-saving and limb-saving non-valved cardiac and
vascular tissues.
The agreement allows CryoLife to distribute existing and newly processed
non-valved cardiac conduits and patches, saphenous veins, femoral veins and
arteries, and aorto-iliac arteries for specified medically urgent uses when
alternative treatments have been exhausted or are unavailable. The Company
estimates that most of the covered tissue under its control is used by surgeons
under the conditions permitted by the agreement.
- More -
"We remain confident in the safety of our processed tissues and continue to
cooperate fully with the FDA," said CryoLife CEO Steve Anderson. "In many cases,
our processed tissues offer treatments for conditions that could not be
otherwise treated, such as certain repairs to a child's diseased heart," he
added.
Since 1984, more than 90,000 CryoLife preserved allograft tissues have been
implanted. The overall infection rates in surgeries involving CryoLife tissues
are comparable to or below published infection rates in surgeries involving
sterile synthetic implant devices.
"I applaud the fact that CryoLife tissues are once again available, as
these tissues, which are often in short supply, are essential to modern medical
care, especially for infants and small children," said John Lamberti, M.D.,
Director, Pediatric Cardiac Surgery, New York Weill Cornell Medical Center. "I
have been implanting these valves and tissues for more than 15 years without
incidence of infection."
"This is good news for patients to have the nation's largest tissue
processor once again able to handle what is surely the most precious gift one
human can give to another," said John Lee, Executive Director Tissue Services of
DCI Donor Services.
The agreement allows the tissue to be released for distribution after
CryoLife completes steps to assure that the tissue is used for approved purposes
and that patients will be notified of risks associated with tissue use.
Specifically, CryoLife must obtain physician prescriptions, and tissue packaging
must contain appropriate warning labels. The agreement also calls for CryoLife
to undertake to identify third-party records of donor tissue testing, and to
destroy tissue from donors in whom micro-organisms associated with an infection
are found.
In addition, the agreement, which has a forty-five working-day term,
specifies interim operating procedures to permit CryoLife to distribute tissues
processed during the term of the agreement. CryoLife also agreed to establish a
corrective action plan within 30 days with steps to validate processing
procedures. A copy of the agreement is available as an Exhibit to the Company's
Form 8-K filed September 6, 2002, and on the Company's Web site,
www.cryolife.com.
Forward-Looking Statements. Statements made in this press release that look
forward in time or that express management's beliefs, expectations or hopes are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These future events may not occur as and when
expected, if at all, and, together with the Company business, are subject to
various risks and uncertainties. Such risks and uncertainties include the risk
that the interim procedures will prove insufficient, that CryoLife may not be
able to establish a satisfactory corrective plan within 30 days, CryoLife's
dependence on cryopreservation of human tissue, the possibility that anticipated
decreases in the Company's revenues and working capital may be severe, the
possibility that SynerGraft-treated heart valves will not have the expected
long-term functionality, repopulate with human recipient cells or reduce immune
response, that future clinical SynerGraft or BioGlue test results will prove
less encouraging than current results, the possibility that the SEC
investigation could be concluded in a manner adverse to the Company, that
SynerGraft, BioGlue, or other regulatory submissions will not be ready when
planned or that anticipated regulatory approvals will not be obtained when
expected, if at all, that surgeons will not continue to accept and use tissues
preserved by the Company or its other products such as BioGlue, competition from
other wound closure products, that CryoLife will be unable to find an investor
in its proprietary light activated drug delivery systems or that such systems
will prove ineffective in oncology applications, that pending government and
legal proceedings against CryoLife will not be resolved in its favor, that the
FDA may require the recall of heart valve tissue processed by CryoLife, that
CryoLife may be forced to discontinue its tissue processing business due to the
FDA Order or subsequent FDA actions, the possibility of rapid technological
change, uncertainties regarding products in development, uncertainties related
to patents and protection of proprietary technology, changes in economic cycles,
competition from other companies, changes in laws and governmental regulations
applicable to CryoLife and other risk factors detailed in CryoLife's Securities
and Exchange Commission filings, including CryoLife's Form 10-Q Filing for the
quarter ended June 30, 2002, and the Company's other SEC filings.
For additional information about the company, visit CryoLife's web site:
http://www.cryolife.com
END