Share prices for Dextera Surgical (NSDQ:DXTR) plunged today after the surgical instruments maker announced a shipping hold on its MicroCutter 5/80 stapler and missed expectations with its fiscal fourth-quarter and 2017 preliminary sales numbers.
Redwood City, Calif.-based Dextera, formerly known as Cardica, said it put the hold on the MicroCutter 5/80 and its reload cartridges after receiving six reports of surgeons being unable to clamp the device after inserting a 30-stapler reload. There were no reports of adverse events or complications from the issue, the company said.
An internal engineering analysis found two problems, one in the stapler and one in the reload cartridge, “which prematurely engage the lock-out safety feature within the stapler,” Dextera said. A ratchet mechanism in the MicroCutter 5/80 handle has already been redesigned and lots manufactured and a fix is under way for the reload issue, the company said.
“A majority of the reports indicate the inability to clamp was identified prior to use in the surgical procedure and Dextera Surgical’s internal testing indicates no increased risk of tissue damage even if the problem is not identified before use in a surgical procedure,” according to a press release.
“We are first and foremost committed to patient safety, and quickly implemented a voluntary temporary shipping hold to fully investigate the issue,” added president & CEO Julian Nikolchev. “While we are disappointed to encounter this issue, we remain steadfast in pursuing our mission to develop this innovative technology to bring smaller and more flexible surgical staplers to the marketplace. Importantly, because the MicroCutter 5/80 Stapler is the only surgical stapler with a 5mm diameter and 80º of articulation, we believe that close monitoring of the performance and rapid incremental improvements to both the stapler and reloads is necessary so that we are able to provide this pivotal tool for surgeons who are trying to meet the increasing need for less invasive surgical procedures.”
Dextera also said it expects to post fiscal Q4 sales of $940,000 to $960,000, missing the consensus estimate on Wall Street for $1.2 million. MicroCutter 5/80 sales are pegged at just $350,000, well below the company’s own forecast for $600,000 to $700,000.
The company predicted full-year sales of $2.9 million to $3.0 million, again missing the The Street’s outlook for $3.5 million. MicroCutter 5/80 sales are expected to be $1.1 million to $1.2 million, down from prior guidance of $1.4 million to $1.5 million, Dextera said.
The double whammy pushed DXTR shares down -28.9% to 22.1¢ apiece today in pre-market trading; the stock was down -17.7% to 25.7¢ per share shortly after the open.