I'm wondering whether the FDA would act separately on CRY's PerClot IDE while unidentified best practice manufacturing issues are pending. If not, the PerClot IDE timeline may slip some more.
I don't think CRY is on the FDA's "Most Loved List". I suspect that CRY may have been on the FDA's "Other List" ever since the Lykin's death and other contaminated tissue was found back during the 2000-2002 period. During this period, CRY took a HUGE inventory write down and then put an enormous amount of "tissue" into the "medical trash". Incidentally and unrelated, stem cells not used for research end up in the "medical trash".
I don't know what manufacturing issues the FDA is concerned about. However, if it is "tissue related", it gets back to the question as to whether CRY should be running a complex tissue cost center that doesn't seem to be generating much, if any, net operating income.
CRY may buy some shares during this period in an attempt to support the price. The stock is so thin that they may be able to do it successfully.
I'm sure SA and DAL will enlighten us during the next conference call. One thing we can be sure of is that CRY will again have "record sales". CRY seems to have "record sales", quarter after quarter, but they seem to have issues with other metrics (consistent EPS growth and stock price to mention two).
These are just my views, opinions, and musings, but who knows? Do your own due diligence.
You know the lawsuit they had way back when involved knee tissue and that division was sold years ago. You know that the infection the guy got was most likely from the hospital where he was operated on. In addition I think after the event CRY put a retired FDA official on their Board of Directors. CRY did expand some QC procedures that added to their costs.
The following is an excerpt from what Robin Young wrote back in early 2010. I know there is no love lost between Steve Anderson and Robin Young. Nonetheless Robin Young wrote the following, and to my knowledge Steve Anderson never refuted it.
Minnesota gave Steve Anderson some his highest professional experiences and, most assuredly, his lowest. Anderson grew up in Minnesota and, to a large extent, is a product of the early cardiovascular industry there.
Brian Lykins also grew up in Minnesota and, in 2001, was a young 23-year-old man in need of knee surgery. His surgeon, a CryoLife customer, chose to implant one of that company’s “fresh” allograft cartilage products. Turns out the allograft was far from “fresh.” It had been harvested too long after death of the donor. It had not been tested adequately and was teeming with one of the most deadly of all bacteria—Clostridium Sordelli. Brian Lykens develop a massive infection and died shortly after his surgery.
As is often the case, when bad things happen, some people figure out how to do the right thing and others don’t. In the classic 1986 Tylenol contamination case Johnson & Johnson immediately recalled all Tylenol at tremendous cost (more than $1 billion) to the company and would not reintroduce it until it could do so safely. Anderson missed that lesson.
The Centers for Disease Control and Prevention investigated Lykins’ death and found 25 cases of serious bacterial infections in people receiving similar operations and identified a single company (CryoLife) as being involved in 14 of those cases. In 2002 the FDA shut down substantial parts of CryoLife’s operations saying that the company could not adequately assure patients that its products were safe.
Dr. Mary Malarkey, director of the division of case management at the FDA’s Office of Compliance and Biologics Quality was quoted in The New York Times at the time as saying about CryoLife: “We found significant violations from our regulations. What they were doing did not ensure tissue safety. CryoLife’s response was, said Malarkey, “inadequate.” CryoLife’s lawyers at the time said they would file an appeal.
The CDC said that CryoLife’s products were involved in 14 cases. The FDA cited more. With just two exceptions, CryoLife did not admit to causing any infections in any tissue recipients.
We won’t recount the tortured way in which the truth finally emerged but suffice it to say that it required investigations from the Centers for Disease Control and the FDA to fully uncover all of the problems at CryoLife and to ensure that new policies and procedures were in place.
The FDA imposed some of the most severe sanctions ever imposed on a still-operating company. At one point, CryoLife had to lay off nearly a quarter of its employees.