) has received a warning letter from the Food and Drug
Administration ("FDA") following an inspection at its Portage
facility at Mich. Products from Stryker's Instruments division
are produced at the facility.
The warning was issued due to a quality systems-related issue
at the facility as well as the marketing of unapproved medical
devices, including the Neptune Waste Management system.
In Jun 2012, Stryker started a Class 1 recall of its Neptune
system due to severe injuries caused by the device. One of the
injuries resulted in fatality. The Neptune system collects
surgical waste fluids as well as evacuates smoke with minimal
human interference during clinical procedures.
Stryker is being warned by the regulatory body for marketing
its products without proper regulatory approval and failing to
inform the FDA regarding the product recall. However, the letter
also acknowledges the fact that the company is working hard to
resolve the issue.
Revenues from Instruments sales increased 3.5% to $330 million
in the fourth quarter of 2012. Solid sales of power tools were
negated by the Neptune product recall, which lowered revenues by
$18 million in the quarter.
Despite the warning letter, Stryker hit a new 52-week high on
Tuesday. Given Stryker's leading position in the medical
technologies market, the warning letter from the FDA failed to
affect stock prices, which remained roughly flat to close at
$66.79 on Tuesday.
St. Jude Medical
), another medical device company, has also received a warning
letter from the FDA regarding a breach of manufacturing practices
at the company's Sylmar, Calif. plant. The plant manufactures
implantable cardiac defibrillators (ICD) (including the highly
controversial Riata ST Optim and Durata leads) from the company's
Implantable Electronic Systems Division.
Stryker currently has a Zacks Rank #3 (Hold). Medical products
companies such as
), which carry a Zacks Rank #2 (Buy), appear impressive.
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