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St. Jude Faces FDA Warning for Quality Issues at Atlanta Plant

According to Reuters , St. Jude Medical Inc.STJ has been recently warned by the FDA regarding the quality of the heart failure monitor CardioMEMS HF systems that are manufactured at its Atlanta plant.

FDA, in a letter dated Sep 30, 2015, notified St. Jude that the Atlanta plant devices are low in quality. After inspecting the facility through Jun 8 to 26, the regulatory body warned the company that its manufacturing, packing, storage and installation procedures are not in conformity to the current goods and manufacturing practice (CGMP) requirements.

Meanwhile, St. Jude claimed that the letter did not specify any particular issue regarding the clinical or field performance of any particular device. Thus, the company will continue its operations at the Atlanta plant while trying to address the issue. Further, the company believes that the warning will not impact its financial performance.

However, we expect that this warning will certainly impact customer sentiment, owing to the fact that the company has previously received several such warnings.

In late Sep 2012, the FDA had commenced an inspection of the Sylmar facility and observed non conformities with CGMP requirements. Failure to validate testing methods was a key concern. In 2013, St. Jude had received a cautionary advice from the FDA concerning its manufacturing practices at the Sylmar, CA plant. In 2009, the FDA had warned St. Jude of certain issues at its Plano facility in Texas.

Zacks Rank and Key Picks

Currently, St. Jude carries a Zacks Rank #2 (Buy). Other well-placed stocks in the medical sector are Masimo MASI , Thoratec THOR and NuVasive NUVA . While Masimo and Thoratec sport a Zacks Rank #1 (Strong Buy), NuVasive has a Zacks Rank #2.

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THORATEC CORP (THOR): Free Stock Analysis Report

ST JUDE MEDICAL (STJ): Free Stock Analysis Report

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NUVASIVE INC (NUVA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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