Natick, Mass.-based med-tech titan Boston Scientific (NYSE:BSX) today issued a warning on its Cognis and Teligen implantable cardioverter defibrillators, citing "an identifiable pattern of malfunction" that led to a small number of adverse events including 1 patient’s death.
Laboratory analysis of the patient’s device found a transformer malfunction, a defect that the company said could result in loss of shocking therapy, rapid battery depletion and loss of programming and remote monitoring capability.
An additional 4 patients reported "a sudden heating sensation at the implant site, likely
due to rapid battery depletion," according to the warning.
Analysts at Leerink Swann were optimistic that the defect, an electrical malfunction in a transformer, won’t amount to more than a blip on investors’ radar. The problem was reported as a cautionary note and not a device recall.
"We think that this issue will not affect the company’s outlook and continue to recommend BSX shares in the belief that the company as a whole now is steadily moving in a positive direction toward ever-increasing financial strength, a return to sales growth, and steadily-expanding profitability," the Leerink analysts wrote.
Boston Scientific confirmed 26 total malfunctions out of about 233,000 Cognis and Teligen ICDs implanted worldwide, noting that the longer a patient has had an implant, the less likely it is to malfunction.
"Cognis/Teligen have proved to be extremely reliable systems with 99.8% expected/predicted reliability at 5 years," according to the analysts. And Boston Scientific is in the midst of a planned phase-out of the lines as as Boston Scientific brings its next generation of ICDs on line, they noted.
"BSX – unrelated to this issue – is in the middle of transitioning to its next generation family of ICDs: Energen, Punctua, Incepta. These products do not use the transformer component in question," according to the Leerink analyst.
Nevertheless, BSX shares were down 1.5% to $5.85 as of about 11 a.m. today.
The device giant recently posted a stellar 1st quarter, in which it nearly doubled Wall Street’s earnings expectations amid dwindling cardiac rhythm management sales.
Boston Scientific posted profits of $113 million, or 8¢ per diluted share, which is more than twice the $46 million, or 3¢ per share, earned during the same period last year. Excluding 1-time charges, the company posted earnings of 15¢ per share, nearly doubling analysts’ 8¢ forecasts for the quarter.