Bayer Corp. sued Chiron Corp., alleging the California biotechnology company hid equipment, patent and regulatory problems in a diagnostic unit that Bayer bought for more than $1 billion.
In a lawsuit filed in federal court in Delaware, Bayer said it bought all the shares of Chiron Diagnostics in November 1998. Chiron's products include rapid blood-testing equipment used in emergency rooms and intensive-care units.
Bayer said Emeryville, Calif.-based Chiron's Rapidpoint 400 blood analyzer, introduced just before the acquisition, was giving false readings, hadn't been properly tested and didn't meet Food and Drug Administration standards.
Chiron officials said they had not seen the lawsuit and could not comment.
Shares of Chiron fell 11 cents to $42.26 on Nasdaq.