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Microcap & Penny Stocks : IMDS nasdaq bulletin board

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To: Dan O who wrote (1604)8/23/1998 6:44:00 PM
From: Andrew Abraham  Read Replies (2) of 4122
 
Dan O,

As I promised, here are selected quotes from the documents the Food and Drug Administration sent me in response to my FOIA request for information on the Grables and the company they owned and ran prior to starting IMDS.

A report from an April 1, 1983 FDA inspection found that the Grables ran Lintronics Industries, Inc. from a room in their home in Plantation, Fla. "Ms. Grable explained that the firm intended to manufacture a device termed a Trans-Illuminator for examination of the female breast to identify unusual growth areas," she told the inspector. "The firm had built a prototype and had submitted a 510k. ... the firm was currently looking for a manufacturing sight [sic] to house the company. They hope to begin manufacturing in May or June. The firm is also in the process of setting up a clinical trial at the [inked out] with the gynecology department."

An inspection on June 12 and 13, 1986, following a complaint that the company was misbranding the company's breast transillumination device (Lintro-Scan), produced a second report, which in part said:

"The device is being promoted for detection of breast cancer.

"According to Mr. Grable, his firm started production of their transillumination device in December, 1985, at this Fort Lauderdale location with him and his wife being the sole two involved in production.... Mr. Grable stated that he has a Masters Degree in Engineering and has knowledge of Good Manufacturing Practices for Medical Devices. The firm refers to its transillumination device as "Lintro-Scan." There are three models; 100-I, 150-I, and 200-M....

"Attached ... was an advertisement which was promoting their Lintro-Scan as equal to or better than mammography for the early detection of breast cancer. I showed the copy of the advertisement to Mr. Grable and he stated he paid to have the advertisement printed in November/December, 1985, Journal of Medical Imagery and Therapy....Mr. Grable stated that a copy of this advertisement was shipped with only one device....

"Mr. Grable stated that he provides his customers with a folder of advertising literature for his Lintro-Scans ... the literature is provided sometimes before and after a device has been shipped ... also passed out at trade shows by his salesman and himself. There are four different pieces of literature in the folder. Some make claims that the Lintro-Scan is an effective way for early detection of breast cancer through non-invasive transillumination."

The inspector inspected the manufacturing facilities and noted the following problems:

"1) There are no written processing procedures nor are processing steps always documented.
2) There are no written procedures for finished device inspection to assure that device specifications are met.
3) There is no program implemented for auditing of the quality assurance program.

"Mr. Grable was informed that [these] may be violations of the Federal Food, Drug & Cosmetic Act. Mr. Grable stated that he agreed with my observation and promised to respond to FDA in writing on each item that was listed."

The FDA conducted another inspection on Oct. 20 and 21, 1988. From that report:

"The firm was promoting the device for early detection of breast cancer. ... The firm was promoting their device as equal to or better than mammography for early detection of breast cancer. ... The President for the firm promised to discontinue promoting the device in this manner. ... Mr. Grable stated that the devices are being promoted in China as an alternative or supplement to x-ray and examination. Mr. Grable state that there are [inked out] devices currently in use in the United States. Mr. Grable state that he as no plans to distributed [sic] any more of his devices in the United States or promote any of the ones currently in use for early detection of breast cancer."

Grable did not keep his word that he would no longer promote his device for early detection of breast cancer. After the Wisconsin Department of Health confiscated one of the Grables' machines, which was set up in a mobile van and was being used to screen patients for breast cancer, the FDA paid the Grables another visit.

From a report following inspections on Sept. 6, 7, 11, 14, 18, and 21, 1990:]

"Lintro-Scan, a device used for transillumination of the breast, was advertised in Wisconsin for 'mammorgraphy screening' *** 'for the early detection of breast cancer ...' etc. Lintronics manufactures the device. During the most recent (10/88 ) inspection, one of the firms principals informed the FDA investigator that Lintro-Scan would not be promoted for breast cancer detection. ..

"The President/CEO [Linda Grable] acknowledges that misbranding literature was printed and distributed to customers...

"During this inspection, the President/CEO drafted a letter asking customers to destroy stocks of one item of misbranding literature, (the 'Rose' brochure). In house stocks of the same brochure were destroyed. However, no corrective action was taken relative to other misbranding literature.

"Ms. Grable stated that Lintronics International Ltd. Inc., (LILI) was incorporated in Florida, on or about February 1988. Ms. Grable stated that she is President/CE, and the only corporate officer. ...

"Ms. Grable stated that there was an 'unrelated' corporation called Lintronics Industries Inc., (LII) located primarily at 5007 Hiatus Rd., Ft. Lauderdale, Florida. She stated that LII was incorporated on or about 1979. The president was Richard J. Grable, (her husband). Linda B. Grable was Vice President, Sales and Marketing. ...Ms. Grable added that LII went public via the Vancouver (Canada) stock exchange on or about 1986. She stated that she and her husband owned two million shared of its stock, at one point. In late 1986, LII was taken over by a corporate raider named Ron Hunt, based in San Diego, California, she said. Ms. Grable stated that she and her husband were 'kicked out of the company' (LII) in the summer of 1986. Then in October 1987, LII went into chapter 11. A court appointed manager took over. Later, this was changed to chapter 7. All assets were liquidated. Ms. Grable stated that the court which handled the bankruptcy is the federal court located in Ft. Lauderdale. She stated that she could not recall the judge's name adding that she did not know the whereabouts of LII's records. ..."

[Note: this story is not consistent with the Oct. 20-21, 1988 FDA report, which lists the Grables' company as Lintronics Industries, Inc. (LII) and not as the new company Lintronics International Ltd. Inc. (LILI).]

"Although Ms. Grable stated that she and her husband were 'kicked out' of Lintronics Industries Inc. Before it went chapter 11, she stated during the inspection that a [inked out] was placed against their personal residence during subsequent bankruptcy proceedings. She stated that she had fought this without success. According to Ms. Grable, the issue was 'payroll taxes.' ...

"Ms. Grable stated that no other devices have been manufactured or sold. She added that LILI has a pending 510(k) on a second device, 'Mammo-Scan.' To date, no complete 'Mammo-Scan' unit has been manufactured, according to Ms. Grable. She stated that Mamo-Scan is also a transillumination device, similar in some respects to Lintro-Scan. According to Mrs. Grable, the Mammo-Scan image is computer-enhanced, whereas the Lintro-Scan image is not. ...

"Mr. [Mike S.] Cicora, [head of Marketing and Sales], stated that he was hired specifically to set up a sales and distribution network for the Mammo-Scan device. He stated that he projects sales of 90-110 units in 1991. ...

Ms. Grable stated that no clinical studies on Mammo-Scan have been conducted. She stated that clnical studies will be done at 3 centers. She stated that [inked out] will do a study at [inked out]. She stated that [inked out] will do a study at [inked out]. When I asked. Ms. Grable stated that no Mammo-Scan has been constructed in final form, to date. She stated that it's still being developed. ...

"Linda B. Grable stated that one employee quit during the inspection. She explained that the company was having financial difficulty. Ms. Grable stated that all of the employee pay checks 'bounced.' Throughout the inspection, Ms. Grable was available only certain dates/times, for the stated reason that she had meetings with potential investors. Ms. Grable stated that these potential investors were aware that a 510(k) has not been approved by FDA. In her own words, 'I'm dead if the 510(k) is not approved, on Mammo-Scan. ...

"Mr. Grable stated that Lintro-Scan is essentially a 12 volt, 75 watt projector bulb, (movie projector bulb), housed inside a wand. Mr. Grable stated that the bulb transmits its light through fiber optics, (a 'Lucite rod') so that heat isn't felt by the breast. Mr. Grable stated that the wand also has a cooling fan. The wand is held beneath the breast. Mr. Grable state that each Lintro-Scan is equipped with a video camera which takes black and white videotape. He stated that the video camera is essentially an 'off the shelf' item, but modified so as to 'see' more of the infrared side of the spectrum. The video camera is simply pointed at the breast while the breast is being manipulated. ... Mr. Grable stated that each Lintro-Scan is also equipped with a Polaroid camera. ...Richard Grable stated that virtually all of the components are 'off the shelf' items. ...

"The referenced sample documents ten Lintro-Scans which were sold and shipped to China between August 26, 1988 and February 26, 1990. The referenced sample also documents the sale of one Lintro-Scan to [inked out] on or about 5/23/90. [This appears to be the person who went around in a mobile "mammography" van, doing breast scans on women in Wisconsin until the authorities shut him down.

"Ms. Grable stated that her husband, Richard J. Grable had done breast exams at 'Health Fairs.' ... She stated that she and "Richard" opened a 'Health Center' and did 'Screenings.' Ms. Grable added that this lasted 'for about 4 months.' She stated that the 'Health Center' was named 'Health Screen.' ...She stated that 40-60 patients total were examined, for the '4 months' that Health Screen was open. Ms. Grable added that her daughter, Deborah Wiltshire, [now Deb O'Brien, head of investor relations!] was the manager. Ms. Gable added that the breast exams at Health Screen were done by a 'clinical specialist' named Judy Schenken. She stated that Judy Schenken was an 'R.T.' I asked what the initials mean, and Ms. Grable stated that she did not know...

"Ms. Grable stated that each breast exam at Health Screen consisted of palpation, then Lintro-Scan. She stated that Health Screen did breast exams only; that there were no medical procedures carried out at Health Screen. Ms. Grable stated that Judy Schenken would palpate the breasts. Judy Schenken would do Lintro-Scan on the breasts, and a video tape was made. Ms. Grable stated that the video tape was then sent to [inked out]. Ms. Grable stated that [inked out] would review each Lintro-Scan breast tape and would make a determination as to whether the patient was disease free or whether additional studies were needed, e.g.. mammography by x-rays. ...

"Ms. Grable added that all patient records at Health Screen were 'seized by the landlord' for non-payment of rent. ...

"She stated that the Health Screen address was also a 'show' office for Lintronics International Ltd. Inc., during the four months that Health Screen was in operation. She stated that this office was 'just for looks,' adding that few Lintronics records were kept there. She stated that 'out of town venture capital types' were brought in and shown the facility. ..

"Commercials at Movie Theaters

"Linda B. Grable stated that 'Health Screen' ran commercials at movie theaters, advertising LintroScan. ... Ms. Grable stated that there was a photographic slide, 'the size of a credit care.' When shown on the movie screen, the commercial said, 'Lintro-Scan Breast Imaging Non Invasive No X-rays,' according to Ms. Grable. ...

[A rose by any other name...]

"Ms. Grable stated that each customer that brought [sic] a Lintro-Scan received 200 copies of the 'Rose' brochure. She added that this applied to US customers and to foreign customers as well. She stated that the "Rose" brochure is particularly popular in China, even though most of the patients cannot read English, for the stated reason that the patients like the 'Rose' drawing on the brochure itself. ...

"She stated that she personally wrote a brochure which had a 'Rose' on its cover, on or about 1984. ...She stated that the brochure was handed out at trade shows. Also every Lintro-Scan which was sold and shipped was accompanied by 2000 copies of the 'Rose' brochure. This brochure is obviously intended as a patient handout, and identified as such in the Grable affidavit dated September 21, 1990. ...

[Compare the above with the "Rose" brochure patient handout IMDS distributed at the 1997 Radiological Society of North America annual meeting!]

"[The Lintro-Scan 'Rose' brochure] reads in part, '***the Lintro-Scan examination is recommended instead of mammography particularly for: *** women with very dense breasts where mammography may not provide a good image. *** Pregnant women. ***' ...

"A copy of the firm's Lintro-Scan promotional video was obtained during the inspection and was submitted with the referenced sample. ...The referenced video is in three segments. The three segments state in part, (respectively):

"(First segment) '***Lintro-Scan *** one women in ten will develop breast cancer during her lifetime*** the key to detection is frequent examination *** the resultant image seen on the monitor provides an instant diagnostic tool *** abnormal conditions such as cysts, fibroadenomas and carcinomas each also display unique on-screen characteristics. *** Malignant tumors typically show up very dramatically on the monitor. *** Extremely effective in detecting tumors in their earliest stages of development ***

"(Second segment) '***Host [opaqued out] *** This is the machine, Richard, that diagnoses cancer very early***.'

"(Third segment) '*** Lintro-Scan *** it detects cancer early by shinning an infrared light through the breast *** a lump shows up as a dark mass *** one of the latest techniques in saving lives ***.' ...

[In a remarkable understatment, the FDA report concluded:] "... Lintronics labeling and advertising claims appear to exceed CDRH-established limits. One of several concerns is the hypothetical patient who might receive Lintro-Scan and be informed that she is disease free when in fact, she has breast cancer. ... Ms. Grable was informed of the CDRH policy on light scanning, i.e. that '***without pre-market approval, it is not for the diagnosis, screening, or detection of specific disease entities, such as breast cancer - not even when used adjunctively.' Ms. Grable was non-committal. (Note: Earlier during the inspection, this policy was also explained to Richard J. Grable who was similarly, non-committal."

The last FDA document I received was from a Dec. 11-12, 1992 investigation. The investigator reported that Linda Grable stated that she sold Lintronics International Ltd., Inc. in October 1991 to Lintronic Technolgies Inc. of Tampa, Florida because the buyers wanted to buy the name for their firm. She then stated that she had a company that manufactured current controlled oscillators which are used in the communication industry. However, she said that she was planning to continue research on a device that she had been developing called "Mammo-Scan" as soon as she could obtain needed funding.

Apparently that closed the FDA's file on the Lintonics chapter of Grables' business enterprises. I'm eager to see what's in the more current files.

-AA

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