The Cooper Companies Inc.
) tumbled after the U.S. Food and Drug Administration (FDA) posted
a warning letter issued to the company on its website. The letter
addresses issues at the company's Puerto Rico contact lens
manufacturing plant. Although FDA issued the letter to COO on Feb
27, it was disclosed by the agency only at the beginning of last
Since the revelation of the FDA warning letter, shares of this
global medical device company dropped 2.8% to close at $130.15 on
the last closing date.
The FDA conducted an inspection of COO's Caribbean facility -
Cooper Vision Caribbean Corporation - from Dec 2013 through Jan
2014. Following the inspection, the federal watchdog has determined
that the company's devices did not conform to the Current Good
Manufacturing Practice (CGMP) requirements of the Quality System
Most of the concerns raised in the warning letter relate to
inadequate internal investigations by COO in the last few years,
following the recall of the Avaira Toric contact lenses. The
warning letter held that the investigations failed to provide
adequate information evaluating the impact of reported problems on
the affected device.
Moreover, COO also failed to divulge information on implementation
of controls to avoid the distribution of potentially adulterated
products while corrective actions are being implemented. The notice
also cited violations pertaining to the implementation of Standard
Operating Procedure (SOP) and incomplete corrective/prevention
However, based on feedback from the company, it is understood that
COO has already responded to several of the violations mentioned in
the letter and much of the remaining outstanding issues are
administrative in nature. As such, management decided not to
disclose the FDA letter in its Q1 earnings call in early March as
it believed that most of the issues had been taken care of.
Furthermore, according to COO, the warning letter is unlikely to
affect ongoing plant operations or potential new product approvals
by the FDA. In addition, the cautionary notice is not likely to
result in any product recall. The company indicated that it should
be ready for re-inspection by the FDA within the next two months.
COO currently carries a Zacks Rank #2 (Buy). Some other stocks in
the medical/dental supply industry that warrant a look are
Milestone Scientific Inc.
West Pharmaceutical Services, Inc.
). All these stocks retain a Zacks Rank #2 (Buy).
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