Analysts Say St. Jude Medical (STJ) May Face New Recall
1/17/2013 10:39:38 AM
Analysts said Wednesday that regulators may be moving toward a recall of St. Jude Medical Inc.'s Durata heart wires, a potentially "ominous" development for the company which has been plagued by recalls of its Riata wires. THE OPINION: St. Jude has recalled several heart device wires in the last few years because the insulation of some of the wires had failed. The Food and Drug Administration has been inspecting the facility where St. Jude makes its implantable heart defibrillators, which are devices implanted in the chest to correct dangerous heart rhythms. On Monday St. Jude Medical disclosed in a regulatory filing that the agency said its inspectors found inconsistencies in how the company manufactured and documented defibrillators. The FDA will not allow any new products to be made at the plant until problems with manufacturing and quality control are fixed. St. Jude disclosed the inspections in mid-October and said it expected a warning letter. The company has said that the insulation problems don't affect its newest heart wire, Durata, because it is coated with a different material. But the FDA is looking at Durata closely and analysts say a recall could be on the way. Citi Investment Research analyst Matthew Dodds said the warning letter is the "next step in a process that looks ominous for St. Jude." Dodds said he thinks the issue won't be cleared up soon, but a Durata recall is "likely." He has said in the past that he thinks Wall Street is overlooking the possibility of such a move.