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The FDA has classified the recent recall of Medtronic's MDT HeartWare Ventricular Assist Device (HVAD) Pump Implant Kit as Class I due to serious health risks associated with its use. As per the FDA release, Medtronic is recalling 157 Pump Implant Kits (labeled as PUMP 1103, PUMP 1104 and PUMP 1104JP) from the United States.
On Dec 18, 2020, Medtronic had sent Urgent Medical Device Correction letters to all affected customers. Again on Dec 23, the letter was sent to all accounts that had previously purchased a Medtronic HVAD Pump. The letter advised the customers to follow a set of Instructions for Use (IFU) to avoid unnecessary pump stoppage.
Notably, the HVAD pump is recognized as the world’s smallest commercially available, full-support, centrifugal ventricular assist device (VAD).
Reason behind the Recall
The FDA report states that the HVAD device might fail to initially start, restart or face a delay in restarting after the pump has been stopped. These incidents have already taken place during pre-implant testing or during the implant or even during post-implant situations. Such incidents can cause serious harm to patients, including a heart attack, worsening heart failure, triggering the need for additional procedures and hospitalizations or even death.
Already two deaths have been reported, with as many as 29 complaints (including 19 serious injuries) being filed.
MDT's Third Heartware Recall
In March 2020, FDA, for the first time, issued a Class I recall, noting about “Potential for an HVAD System user to mistakenly insert the Battery Charger AC Adapter into an HVAD Controller power port”.
Again in May, another Class I recall was issued with statement that the use of the affected products might cause serious harm to patients, including dizziness, loss of consciousness, bleeding, fluid build-up around the heart, additional medical procedures and death.
These back-to-back incidents will, undoubtedly, create major hiccups in the company’s VAD performance.
Share Price Performance
Over the past six months, Medtronic has underperformed the industry it belongs to. The stock has improved 11.5% compared with the industry's 12.4% rise.
FDA Recalls Heating Up MedTech Space
Last week, Hill Rom received a Class I recall notice from the FDA for its Liko Multirall 200 Overhead Lift with customers filing complaint about the Q-link strap lock not getting attached to the S65 carriage hook as it should.A total of 34 complaints were issued about this device and 22 were reported for serious injuries. Two deaths have been reported as well.
Another Class I recall of last week was issued to Boston Scientific's Emblem subcutaneous implantable cardioverter defibrillator (S-ICD) system. Per the report, the device’s manufacturing process might allow moisture to get inside the defibrillator, and cause a short-circuit when it tries to deliver high voltage shocks. A total of six complaints have been issued, so far, with no reports of injuries or deaths.
Zacks Rank and Key Picks
Currently, Medtronic carries a Zacks Rank #3 (Hold).
A few better-ranked socks from the broader medical space are Acorda Therapeutics, Inc. ACOR, Atea Pharmaceuticals, Inc. AVIR and Clearside Biomedical, Inc. CLSD, each carrying a Zacks Rank #2 (Buy). You can seethe complete list of Zacks #1Rank (Strong Buy) stocks here.
Acorda Therapeutics has a projected long-term earnings growth rate of 23%.
Atea Pharmaceuticals has an expected long-term earnings growth rate of 164%.
Clearside Biomedical has an estimated long-term earnings growth rate of 24%.
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