Former ExThera Medical Executive Admits to Concealing Patient Deaths From FDA

A former ExThera Medical Corporation executive has agreed to admit her role in concealing ​reports of complications and deaths involving cancer patients who were treated with the company’s blood filtration device.

A plea hearing for Sanja Ilic, 58, has not yet been scheduled. Separately, ExThera Medical Corporation (ExThera) has entered into a three-year deferred prosecution agreement (DPA) with the U.S. Department of Justice, admitting that it failed to submit required adverse event reports in order to defraud or mislead the U.S. Food and Drug Administration (FDA).

The DPA requires ExThera to implement a compliance and ethics program to prevent future violations of the Food, Drug, and Cosmetic Act’s adverse event reporting requirements. The company will pay $750,000 (adjusted based on its current ability to pay) and the agreement contemplates the possibility that ExThera may file for bankruptcy, providing the $750,000 will be held in escrow to satisfy any amounts owed in related civil litigation. ExThera has also agreed to consent to entry of a $5.69 million forfeiture order.

“The DOJ’s thorough investigation and resolution allows the company to move forward in its effort to save lives,’’ an ExThera spokesman said. “We hope the resolution helps clear up what ExThera believes were prejudicial characterizations of our company in the media.” 

ExThera manufactured the Seraph 100 Microbind Affinity blood filter, an extracorporeal device used to remove pathogens from the bloodstream of critically ill patients. The company confirmed the Seraph 100’s efficacy at removing many different bacteria, viruses, and fungi, including the often-deadly Candida auris strain, and a Brooke Army Medical Center study showed the product was successfully used in extracorporeal membrane oxygenation (ECMO), with no device-related adverse events. 

In 2024, however, Ilic—ExThera’s chief regulatory officer at the time—failed to disclose to the FDA the deaths of two patients treated with the blood filtration device at a clinic in Antigua. Before starting the clinic treatments, Ilic notified some of ExThera’s leadership and regulatory staff of potential adverse events—including “life-threatening” complications—that patients could experience from using the Seraph 100, federal prosecutors alleged. Some clinic patients and their treating physicians said they believed those patients had subsequently experienced some of these adverse complications after being treated with the device.

In March and April 2024, Ilic learned that two patients treated at the Antigua clinic were experiencing serious health issues and died within days of each other. Reuters identified the victims as David Hudlow of Panama City, Fla., and Kyle Chupp of Orillia, Ontario (Canada).

Ilic understood that disclosing the deaths could have triggered FDA regulatory scrutiny, caused clinical trial partners to withdraw their participation, and jeopardized ExThera’s and Ilic’s future financial prospects. When the Antigua clinic began treating patients, ExThera had just secured $10 million, and millions more dollars were possibly within reach through future distribution agreements. Additionally, Ilic was overseeing ExThera’s first U.S. clinical study involving the Seraph 100’s use to treat cancer. Ilic and ExThera potentially stood to lose significant amounts of money if they filed negative adverse event reports to the FDA related to the Antigua clinic. Rather than comply with her legal obligation to report the events, Ilic suppressed this critical information to defraud and mislead the FDA, prosecutors charged.

Following public reporting about the Seraph 100 device and after Ilic was terminated from ExThera, the company filed several adverse event reports with the FDA relating to its use for treating cancer outside the United States.

The government reached its resolution with ExThera based on several factors, including the nature and seriousness of the offense, and the fact the company has minimal remaining operations. ExThera also did not voluntarily and timely self-disclose the conduct to the federal government but did receive credit for clearly accepting responsibility for its criminal conduct, fully cooperating with the government’s investigation, and timely implementing remedial measures.

In a statement emailed to various media outlets, ExThera Medical noted the Justice Department acknowledged the company remediated its conduct by (1) hiring new personnel, including experienced regulatory compliance and legal leadership, (2) enhancing and standardizing training, documentation, and adverse event reporting, and (3) establishing regular third-party audits and other internal monitoring procedures. ExThera said it has also committed to implementing compliance functions commensurate with its operations going forward.

“ExThera is pleased to have resolved this matter, and appreciative of the DOJ’s recognition of its cooperation. ExThera looks forward to resuming its operations and the continued development of its life-saving technologies that are becoming more important with the creation of AI pathogens and biological weapons,” the statement read.

Ilic was charged with one count of failure to report adverse events with the intent to defraud or mislead the FDA. She faces a maximum three-year prison sentence (prosecutors recommend a 34-month term), one year of supervised release, and up to $250,000 in fines or twice the gross gain or twice the gross loss pursuant to forfeiture and restitution.

The FDA, FBI, Department of Health and Human Services Office of Inspector General, Homeland Security Investigations and U.S. Postal Inspection Service are investigating the case.

Assistant Chiefs Kevin Lowell and William Schurmann and Trial Attorneys John Howard and Sarah Rocha of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mackenzie Queenin, Chief of the Health Care Fraud Unit, and Sarah Hoefle for the District of Massachusetts are prosecuting the case.

This announcement is the first resolution of a corporate defendant by the Health Care Fraud Unit’s New England Strike Force since it expanded to Massachusetts.

The Fraud Section leads the Criminal Division’s efforts to combat healthcare fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of eight strike forces operating in federal districts across the country, has charged more than 6,200 defendants who collectively billed federal healthcare programs and private insurers more than $45 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, is taking steps to hold providers accountable for their involvement in healthcare fraud schemes.