Boston Scientific resumed shipments of virtually all of its implantable defibrillators April 15 following retrospective clearance by FDA of two manufacturing changes.

After a costly 30-day moratorium, the company reintroduced at full capacity its Teligen implantable cardioverter defibrillators and Cognis cardiac resynchronization therapy defibrillators, manufactured at the firm's Klonmel, Ireland, facility.

But it will likely be at least several more weeks before the firm is able to resume shipments of all lines of its ICD and CRT-D devices, including Confient , Livian , Prizm , Contak Renewal and Vitality .

Internal Review Flags More Lapses

On March 15, Boston Scientific removed all of its ICDs and CRT-Ds from the U.S. market after identifying two manufacturing changes that had been made without proper FDA approval (¹ Also see "Boston Scientific Recalls All Implantable Defibrillators, Suspends Sales" - Medtech Insight, 22 March, 2010.).

The firm submitted the changes to FDA as "30-day notice" PMA supplements, which allow a sponsor to market a device with the targeted revisions if the company does not hear concerns back from the agency.

In this case, the changes involved a modified sterilization process and a new supply vendor. Boston Scientific said the revisions were internally validated but never run by FDA (² Also see "Boston Scientific Confirms Manufacturing Changes That Led To ICD Recall" - Medtech Insight, 5 April, 2010.).

After submitting the 30-day notices, Boston Scientific says it conducted an internal review that found "a few additional instances where the company did not submit the appropriate documentation."

The firm said April 15 that it has submitted the necessary documentation and is working closely with FDA to secure clearances to allow the other product lines back on the U.S. market.

"We are committed to doing the right thing every time, and we acted voluntarily, swiftly and appropriately to ensure compliance with all regulatory requirements," said Ray Elliott, Boston Scientific's CEO.

'Lion's Share' Of ICD Revenue Accounted For

According to J.P. Morgan analyst Michael Weinstein, Cognis and Teligen represent "the lion's share" of the domestic ICD/CRT business, at over 90% of U.S. implants.

"This is a big step and an important win for the company," Weinstein writes in an April 15 note.

The analyst anticipates a return to market for all product lines in the next three to four weeks.

Analysts had estimated that the firm would lose $5 million per day that the ICDs were off the U.S. market, and that Boston Scientific could lose about 5% market share to competitors St. Jude Medical and Medtronic.

But Weinstein says the market share impact of the recall may be less than originally expected.

Nevertheless, the firm "will need to restore physicians' confidence in its products, which will take time," Wells Fargo analyst Larry Biegelsen maintains in an April 15 note.

Biegelsen estimates the recall reduced Boston Scientific's operational earnings per share in 2010 by about 5%.

Firm Will Give Updated Guidance April 27

Boston Scientific says it is evaluating the impact of the recall on its financial results and will provide an update during its first-quarter earnings call, scheduled for April 27.

Boston Scientific concedes that the actions may have a "material impact" on prior revenue, operating profit and cash flow guidance for the first quarter and full year of 2010.

ICD sales outside the U.S. were never affected by the March 15 recall. The firm's pacemaker sales were also not impacted.

On April 16, the first day of trading following the announcement, company shares rose 2.8% to close at $7.34.

- Jessica Bylander ( ³ j.bylander@elsevier.com )

Boston Scientific Resumes Most, Not All, Implantable Defibrillator Shipments

More from Archive

More from Medtech Insight