Prosecutor Jennie Nordin said it can't be proven that Dr. Paolo Macchiarini would be guilty of either causing another's death or causing bodily harm, so he is no longer a suspect.
"We have been unable to prove that any crimes have been committed," Nordin told a news conference Thursday.
"We are satisfied that the probe has been discontinued," Macchiarini's lawyer Bjorn Hurtig told Swedish broadcaster SVT.
Macchiarini said he was glad the authorities had been so thorough in their investigation.
"I did my very best to give these terminally patients a chance of a cure," he said in an email to The Associated Press.
Macchiarini called the resulting negative press coverage of the scandal "extreme," and said the investigations revealed many instances where such pioneering treatments could be better managed in the future.
"Much of what happened has been highly misrepresented," Macchiarini said. "The vilification of health care professionals trying to do their best for patients under very difficult conditions can only have negative effects on both professionals and patients in the future."
Macchiarini was fired from Sweden's prestigious Karolinska Institute in March 2016 for breaching medical ethics after being accused of falsifying his resume and misrepresenting his work. His work was once considered revolutionary.
The Italian doctor was part of the team that conducted the world's first transplant using a windpipe partly made from a patient's own stem cells.
When Macchiarini's first windpipe transplant was reported in the medical journal Lancet in 2008, it was hailed as a breakthrough in regenerative medicine. Macchiarini's new airway - partly made using stem cells from the patient - was thought to herald a new era where new organs could be made in the laboratory.
Despite subsequent findings by an independent commission in Sweden that found numerous problems in Macchiarini's work, the Lancet has so far declined to retract the study.
Swedish prosecutors concluded in Thursday's report that four of the five operations they were investigating were "negligently carried out," noting that Macchiarini's use of experimental artificial windpipes violated standard medical protocol.
But because the investigators could not establish that Macchiarini's actions were directly responsible for the consequences later suffered by his patients, they said there wasn't enough evidence that he had acted illegally.
Nordin said because the patients' cases were so complex, there was no consensus from the medical experts on what treatment should have been offered. That made the suspicions about Macchiarini's wrongdoing "difficult to prove," she said.
The investigators concluded, however, that Macchiarini's use of the artificial windpipes was unjustified.
"There is no doubt that the use of synthetic tracheas has been negligent and that it has entailed a deliberate risk-taking of a serious nature," the Swedish probe said.
Associated Press Writers Maria Cheng in London and Jan M. Olsen in Copenhagen, Denmark, contributed to this report.
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