UPDATE 3-Boston Scientific shipping problems 'serious' -FDA
Tue Aug 23, 2005 05:39 PM ET
(Adds details and background throughout, updates shares to close)
By Susan Heavey
WASHINGTON, Aug 23 (Reuters) - Boston Scientific Corp.'s (BSX.N: Quote, Profile, Research) distribution process has "serious" problems that allowed flawed medical devices to be shipped, including its Taxus drug-coated stent, U.S. regulators said in a letter made public on Tuesday.
FDA inspectors said the company failed to properly monitor products so that only acceptable devices were distributed, according to the letter dated Aug. 10.
The warning, which also targeted the device maker's Vaxcel chest ports and Symmetry catheter, is the latest setback for the device maker after a string of manufacturing-related product recalls and other FDA warnings.
Boston Scientific spokesman Charles Rudnick said the distribution problems did not harm patients and the company had already taken some corrective actions.
The company's shares, which have underperformend the S&P 500 by 28 percent since January, closed down 4.53 percent, or $1.23, to $25.92 on the New York Stock Exchange. Earlier on Tuesday it had hit a new 52-week low of $25.75.
Yet industry analysts said Tuesday's letter was not major because it faulted oversight practices, not products. But it did renew worries about the beleaguered medical device sector, which has been hit hard during the last year with a series of manufacturing-related problems, they said.
"We do not dispute that some of these mistakes occurred," Rudnick said. "We're working on the process issues."
The latest FDA warning letter followed an inspection of Boston Scientific's Quincy, Massachusetts, shipping facility that ended in May.
Agency inspectors said the company did not have adequate management oversight to review quality and "failed to implement procedures to assure that only devices approved for release are distributed."
It also did not properly document corrective actions or review data that could help pinpoint problems.
"On a number of occasions, your firm shipped medical devices that were not considered acceptable for release," it said. The letter did not mention any impact on patients and an FDA spokeswoman was not available for comment.
Eight Taxus heart stents that failed a quality test were sent to hospitals, although Boston Scientific said it later recovered them. The FDA also said the company shipped five Vaxcel units on three different dates after they were recalled in August 2004.
Boston Scientific initially responded to the FDA's concerns with a June 20 letter offering its commitment to improving its quality controls, the latest warning said. But the agency said that was insufficient.
"Your response does not identify how and when you plan to implement significant, broad-based corrective actions, nor does it provide sufficient evidence to establish that you have made real changes to your current quality system," the FDA said.
Last year, Boston Scientific recalled 99,000 Taxus stents after reports of malfunctions. Rival Guidant Corp. (GDT.N: Quote, Profile, Research) , which agreed to be acquired by Johnson & Johnson (JNJ.N: Quote, Profile, Research) , has recalled some defibrillators and heart pacemakers.
Ryan Rauch, an analyst with Jefferies & Company Inc., said the FDA was not likely to take action against the Taxus devices because it would cut the U.S. supply in half. But he added that the warning highlighted sector woes.
A.G. Edwards analyst Jan Wald said Boston Scientific's inadequate response to the FDA was a concern.
"It sounds like there's more work to do for Boston Scientific."
The FDA said Boston Scientific has 15 working days after receiving the letter to give an updated response.
Agency officials issue dozens of warning letters each year. Most are resolved without pena
BSX stock will be in the teens by next week. There are just too many lawsuits and litigations they will lose for killing that many patients and other where sick and injured, their products appear to be a joke.
Sciences and Medicine
Studies Give Edge To J&J Stent
Matthew Herper, 08.16.05, 4:00 PM ET
NEW YORK - Johnson & Johnson may have a better product than its rival, Boston Scientific, for holding open clogged arteries.
New data published in the two leading medical journals indicates that patients who receive Cypher, a drug-coated stent made by Johnson & Johnson (nyse: JNJ - news - people ), may be less likely to need a repeat surgery than those who get Taxus, a rival--and more popular--stent from Boston Scientific (nyse: BSX - news - people ).
That's more bad news for Boston Scientific, which has seen shares drop 30% since September 2004 amid concerns over its over-reliance on drug-coated
BSX is not going anywhere but down from here, theres nothing but bad news and knowing a few things about this company, I am sure they have a few more bombs to drop, best case scenario, FDA doesn't shut them down.
The competition is taking over and the stent prices are falling, and patients are dying, and getting sick, and BSX is thrashing around throwing money at junk investments because they know they have no future and no pipeline, but its a waste and the debt is growing fast.
Thats one reason insiders are still selling shares heavily.
FDA will probably put an end to the patient deaths and force the removal of Taxus.
Well I have been a long time holder of this company, but after doing some serious research I have discovered several unnerving things and I expect them to have some definite issues to deal with if not BK. They need to get new management, but I am going to sell and take my loss to preserve some of my money and not have to deal with the stress of watching this investment fail. I wish the best of luck to all my old fellow longs, looks like you will need it.
Try, I'm just blowing you a few kisses for taking on the scum.
I really think it is a vendetta rather than a short. It is hard for me to believe anyone would spend this much time for no affect, unless they are REALLY stupid or just want to irritate. Boulder comes to mind, he just wanted to annoy people, had no other reason for posting.....so that type does exist....oh well, I for one like that you challenge them/him.
Thanks. It does get tiresome, I know, but my main goal is to change the subject lines to something positive. Given the brainless content, I think their only real goal is to set up a string of negative subject lines. There is obviouly NO thought process there (why would they continue to post Kramer, for Cramer week after week).
It is kinda fun to throw in a few insults, although I doubt if they ever look at them...
I agree with the vendetta concept. BSX often fires ones that don't produce. They may be bitter. BSX is a cash machine. I can't wait for 4th qtr. results that should not have any significant one time charges like Medinol last qtr. Will we see 800 million on the bottom line?
I will probably sell tomorrow as well, a lot of people don't realize the negative impact that that Medtronic and Abbott stealing market share will have. Now Merck wants to take some.
And then theres this.
This pig is going to lose more money, insiders sell because they know there is major problems here, more downgrades coming soon.
there are serious issues here timber is never wrong about these things u see only the tip of the iceburg, preserve capital and get out before next week crash.
dont hold pig over the weekend. Bad news coming