St Jude sees possible FDA warning letter
St. Jude Medical Inc warned Wall Street that U.S. health regulators might issue a warning letter about one of its manufacturing facilities in California as it reported another weak quarterly performance and reeled in its outlook.
St. Jude shares fell 5.7 percent to $40.48 in late morning trading on the New York Stock Exchange.
During a conference call with analysts, Chief Executive Officer Dan Starks said there was a possibility St. Jude would receive a warning letter, known in the industry as Form 483, from the U.S. Food and Drug Administration about its manufacturing facility in Sylmar, California, where it makes cardiac rhythm management products.
It's a risk, and don't be shocked if that risk is realized, Starks said, adding that the company wanted to communicate this possibility in order to avoid surprising investors if it actually happens.
Executives would not say whether its Durata leads -- wires that connect the implantable defibrillator to the heart -- were at the core of a potential problem at the Sylmar facility.
Durata leads came under scrutiny earlier this year as a prominent cardiologist raised safety concerns. An earlier version of the Durata lead, called Riata, were recalled because the insulation covering the wires wore away, exposing the cables.
In a telephone interview, Chief Financial Officer John Heinmiller said there are five facilities around the world that make products and components for St. Jude's cardiac rhythm management products, and each facility makes all products.
Asked why management thought a warning letter may be coming, Heinmiller said it is too early to speculate.
Typically, warning letters are issued 60 to 90 days after a facility has been inspected. Heinmiller said the inspection is near an end. He declined to say what questions inspectors asked or what comments they made during the inspection process.
Sometimes companies get warning letters over their record-keeping practices, rather than the actual production of a device or component.
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