The FDA’s month-long inspection of Edwards Lifesciences’ (NYSE:EW) Draper, Utah, manufacturing facility spurred a couple of recalls and a preemptive company note to investors, but it still hasn’t stirred much concern on Wall Street where shares were up 2.9% on the day today and up 4% since the end of May.
The January 22 inspection took place at a facility where Edwards manufactures, among other things, certain components of its Sapien transcatheter aortic valve implantation system, according to the letter. The FDA cites 7 manufacturing violations in great detail, including some that resulted in the company pulling some cannulae and some peripheral retrograde cardioplegia device kits off the shelves.
The listed violations include "failure to validate" certain manufacturing processes that "cannot be fully verified by subsequent inspection and test."
The inspectors noted 6 customer complaints regarding Edwards’ QuickDraw cannulae that broke during cardiac procedures, adding that the company doesn’t sufficiently validate oven temperatures needed to insure proper bonding during manufacturing. Edwards said in a March 15 response that the broken cannulae were the result of physician error, "in spite of the complaint investigations concluding the bonds were breaking due to inadequate oven temperatures," according to the FDA.
The company later told the FDA it had ceased manufacturing of the QuickDraw cannulae and initiated a global recall. Edwards also launched a recall of its ProPlege Peripheral Retrograde Cardioplegia device kits amid the inspection, according to the FDA letter.
The agency didn’t list any specific issues with manufacturing of the Sapien devices, which may explain why Wall Street largely shrugged off the warning when Edwards issued a press release late last month, ahead of the FDA’s publication of the letter.
The CSS products that make up most of the output of the troubled Utah facility amounted to less than $10 million in sales last year, about 2% of the $510.5 million total for Edwards. The only devices made at the Draper, Utah facility related to Edwards’ flagship Sapien transcatheter aortic valve implant are "delivery system components and accessories," according to a company press release.