The Orange County District Attorney’s Office is suing two related Yorba Linda medical companies, saying they’re illegally profiting off the sale of fetal tissue donated by abortion providers.
The lawsuit, filed in Orange County Superior Court late Tuesday, accuses DaVinci Biosciences and its sister company, DV Biologics, of advertising and selling hundreds of units of fetal tissue and stem cells to research facilities around the world, collecting hundreds of thousands of dollars in revenue.
District Attorney Tony Rackauckas, in a Wednesday news conference, said the companies treated human parts as commodities rather than following the law.
“This case is not about whether it should be lawful to sell fetal parts, or whether fetal-tissue research is ethical or legal,” he said. “This lawsuit is aimed at taking the profit out of selling body parts.”
Fetal tissue and its stem cells have long been used in medical research in the United States. Under state and federal laws, it is illegal for a company to profit from the sale of the tissue itself, but it can charge for processing and shipping.
Michael Tein, a lawyer for DaVinci Biosciences and DV Biologics, said DaVinci has complied with regulations and never turned a profit.
“Their scientists worked day and night to discover cell-based medical treatments and improve the quality of life for patients suffering from cancer, Alzheimer’s and other deadly diseases,” he said.
“Shipments of research materials were made only to other scientists working at fully accredited universities and laboratories,” Tein added. “This is a civil lawsuit over cost-accounting issues. We look forward to explaining the full story to the court.”
In the suit, DaVinci Biosciences and DV Biologics are accused of profiting from at least 500 sales to research facilities from 2012 through 2015, and selling products for more than what it actually cost to process, handle and ship the tissue.
The District Attorney’s Office says the companies generated more than $1.5 million in revenue directly from the sale of fetal tissue from 2013 to 2015, in addition to charging marked-up prices for shipping and processing.
DaVinci Biosciences is a medical research company that focuses on spinal and sports injuries and degenerative diseases. DV Biologics supplies human tissue to other research facilities.
DaVinci Biosciences is jointly owned by family members Andres Isaias, Luis Isaias and Estefano Isaias.
Two of the three owners also own and manage DV Biologics.
The issue of fetal-tissue sale has been at the political forefront over the past year after an Irvine-based anti-abortion group, the Center for Medical Progress, released undercover videos that it said show Planned Parenthood trying to sell fetal tissue illegally.
The videos sparked congressional hearings and several state investigations, which so far have found no illegal practices by Planned Parenthood. In the wake of the controversy, the nonprofit organization last year stopped accepting reimbursements to cover transportation and other costs for fetal tissue donations.
The lawuit says DaVinci Biosciences and DV Biologics obtained donated fetal tissue from Planned Parenthood and other providers, turning it into a “profit-driven” business, selling stem cells from organs including hearts, lungs, kidneys, brains and intestines.
According to the lawsuit, the companies hired sales and marketing staffers and pushed them to meet revenue goals through discount promotions such as “summer sales” and coupons; the products were advertised in catalogs, brochures and other materials.
“It costs us roughly $25 per unit to manufacture, and we are selling from $170,” one employee wrote in an email, according to the lawsuit.
From 2009 to 2015, the companies collected $56,678 in “packing and handling” fees marked up by roughly 50 percent over the actual cost of packaging and handling, according to the suit.
Employees were paid a commission on profits they earned from the packing and handling charges, the lawsuit says.
Some products were allegedly sold to different customers at different prices.
Deputy District Attorney Kelly Ernby said the companies previously had a contract with Planned Parenthood, but Planned Parenthood did not collect any money for fetal tissue and is not part of the investigation.
The companies then acquired tissue from hospitals and other providers, according to the lawsuit.
Rackauckas noted that it is routine for abortion providers like Planned Parenthood to donate fetal tissue for scientific research. The patients must first sign a consent form.
The suit seeks a $1.6 million fine and an injunction preventing the future sale of fetal tissue at a profit.
Rackauckas said he does not know of any other companies in Orange County that acquire fetal tissue and provide it to research facilities.
The county’s top prosecutor said he considered criminal charges, but the law does not provide for any criminal penalties. He then opted to file a lawsuit.
Contact the writer: kpuente@ocregister.com
