The FDA yesterday released a report on a St. Jude Medical (NYSE:STJ) plant in Sylmar, Calif., that makes its Durata pacemaker leads, finding 11 problems with the plant after inspections in September and October.
The news sent STJ shares down more than 11% today as investors reacted to the news. St. Jude released a heavily redacted copy of the report in October, along with its 3rd-quarter results.
Investors are watching closely for signs of problems with the next-generation Durata leads after the St. Paul, Minn.-based medical device company recalled some of its Riata leads last year. Last month CEO Daniel Starks cautioned that St. Jude risked a warning from the federal watchdog agency over the Sylmar plant.
Sure enough, the FDA obliged the next week with a Form 483 detailing the 11 problems found at the plant. Yesterday the agency released a more revealing copy of the 8-page report than provided by St. Jude, finding that the company’s "design verification activities were inadequate" and multiple issues with the Durata leads’ process validation protocol.
"You failed to follow your written test procedure during design verification testing," according to the report. "Your procedures require each lead to be tested 5 times and the mean of the 5 tests is considered your test result. During your design verification you only tested each lead 1 time to determine your design verification results as apposed [sic] to determining the mean of 5 tests results per lead."
The FDA inspector also found problems with St. Jude’s risk analysis of the Durata leads and its design history file.
Your Durata design risk analysis [redacted] is inadequate in that it combines different recalled and not recalled devices," according to the report. "Your firm was unable to clearly identify the full content of your Durata design history file, for example: I was unable to determine when your firm approved your Durata design inputs, outputs, verification, validation, design transfer and when you conducted your final approval of your Durata design. I was also unable to determine which inputs were changed or unchanged from 1997 onward, which is the origination of your Durata design."
And there were problems with St. Jude’s corrective action/preventive action logs, called CAPAs, the inspector wrote. A review of 11 "recently closed" CAPAs found that 2 were closed without verifying their effectiveness, 2 others were closed and marked "’no effectiveness check is required’ with no justification, which is required by your procedures if no verification check is performed," according to the report.
Six other CAPAs indicated an effectiveness check would be run in 6 to 9 months, but "[n]one of the 11 CAPAs reviewed, including these 6, specify how you are going to verify your effectiveness," the inspector wrote.
The FDA inspector also found problems with how St. Jude handles product complaints, namely that the company doesn’t indicate whether a decision to investigate has been made. One specific complaint over a Durata lead was particularly problematic, the inspector wrote. "I was unable to determine which documents were included in the complaint as the documents are not identified as being linked to the complaint and there is no individual complaint identifier."
STJ shares were down 11.1% to $31.74 as of about 11:30 a.m. today.
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