SANTA ANA – The Orange County District Attorney’s Office has obtained a $7.8 million settlement in a civil lawsuit against two Yorba Linda medical companies accused of illegally profiting from the sale fetal tissue and stem cells.
Under the agreement filed Friday in Orange County Superior Court, DaVinci Biosciences and its sister company, DV Biologics, must permanently close all business operations in California and pay the $7.8 million by donating assets and biological materials to a medical school, officials said.
The companies must also pay $195,000 in civil penalties and have admitted liability in the case, prosecutors said.
“This settlement seized all profits from DV Biologics and DaVinci Biosciences, which they acquired by viewing body parts as a commodity and illegally selling fetal tissues for valuable consideration,” District Attorney Tony Rackauckas said in a statement.
Prosecutors said the companies collected fetal tissue donated by abortion providers and then advertised and sold hundreds of units of tissue and stem cells to research facilities around the world, collecting hundreds of thousands of dollars each year in revenue.
Under state and federal laws, companies can charge for the processing and shipping of fetal tissue but it is illegal for a company to profit from the sale of the tissue itself.
Prosecutors said the companies in 2009 hired marketing consultants and launched an advertising campaign with “summer sales” and promotional discounts. Items were advertised in a catalog with prices ranging from $40 for a vial of “total RNA” cells from several fetal tissue sources to $1,100 for a vial of specific cells.
By 2015, the companies had generated more than $1.5 million from at least 500 sales to research facilities, selling products for more than what it actually cost to process, handle and ship the tissue, prosecutors said.
Employees were also paid a commission on profits they earned from the packing and handling charges, prosecutors said.
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.
In a statement, the companies’ lawyer Michael Tein said: “This was a hotly contested case, to say the least. In the end, the parties forged a settlement that benefits medical research. DV’s donation is the largest of its kind in history.
“It allows physicians and scientists to continue to use these precious cells to find cures for the deadliest childhood and adult diseases,” he said. “From the beginning, this has always been DV’s mission.”
DaVinci Biosciences is owned by family members Andres Isaias, Luis Isaias and Estefano Isaias, while two of the three also own and manage DV Biologics.
Prosecutors said the companies acquired tissue from hospitals and other providers. It is routine for abortion providers to donate fetal tissue for scientific research, if the patient signs a consent form.