OC DA gets fetal tissue sellers to shut down

A recent settlement with the Orange County district attorney’s office requires two companies that illegally sold fetal tissue and stem cells to shut down their businesses and donate their remaining tissue and cells, valued at nearly $7.6 million, to a medical school in the United States.

DV Biologics LLC, and its sister company, DaVinci Biosciences LLC, are to pay $195,000 in civil penalties in addition to the donations, which must be made to a nonprofit institute associated with a school that’s under the National Institutes of Health.

They also must permanently close, and if they don’t donate the biological samples or pay the fine within 65 days, they’ll be on the hook for the entire $7.785 million judgment, according to a final judgment approved Friday by Orange County Superior Court Judge Deborah C. Servino.

The judgment includes a list of the inventory to be donated, ranging from 599 cardiac progenitor cells to 10 male gonad tissues.

Deputy District Attorney Kelly A. Ernby prosecuted the case.

District Attorney Anthony J. Rackauckas said in a news release that the settlement seized all company profits, “which they acquired by viewing body parts as a commodity and illegally selling fetal tissues for valuable consideration.”

“These companies will never be able to operate again in Orange County or the State of California,” Rackauckas said.

Michael R. Tein of Lewis Tein PL in Miami represented the defendants. He was not available for comment Monday.

R. Joseph Burby, H. Mark Mersel and Anne Redcross Beehler of Bryan Cave LLP also represented the defendants. A Bryan Cave spokeswoman declined comment.

Ernby’s complaint sought a single cause of action for violating state Business and Professions Code section 17200, unfair practices.

The district attorney’s news release also said the companies violated state Health and Safety Code section 125320 as well as United States Code sections 289g-2(a) and 289g, which prohibit the interstate transfer of fetal tissue for profit. People v. DV Biologics LLC, 2016-00880665 (Orange Super. Ct., filed Oct. 11, 2016).

Rackauckas’ office started investigating the companies in September 2015 after receiving a complaint from the Irvine-based Center for Medical Progress, which gained national attention for its undercover videos about Planned Parenthood.

The two companies were jointly owned by the same people, Andres Isaias, Estefano Isaias and Estefano Isaias Jr., and operated illegally for months after the California Franchise Tax Board forfeited their powers, rights and privileges, according to the district attorney’s office.

DaVinci incorporated in 2007 and by 2009 was beginning to sell products derived from cells and tissues. DV Biologics incorporated about that same time. By 2011, sales had tripled and fetal-derived tissues and cells were being bought around the world.

The news release details a price-gouging plan that included an email in which company officials suggested raising the price of prenatal renal fibroblasts, saying: “1000% gross does not seem unreasonable based on infrastructure and lack of competition.”