Infusion pump maker Hospira (NYSE:HSP) restated its 2013 financial guidance after the FDA banned imports of certain of Hospira’s infusion pumps.
Hospira received word yesterday that the FDA had prohibited U.S. imports of the company’s Plum, GemStar, and LifeCare PCA infusion pumps, which are manufactured at a Costa Rica facility.
The news sent HSP shares tumbling 14.6% from an open of $34.90 on February 13 to $29.79 as of about 2 p.m. today.
The FDA issued the new bans on Hospira’s products shortly after Hospira had stated its 4th-quarter and full-year 2012 earnings report with guidance for the year to come. The company scrambled to revise forward-looking estimates that had been issued during its earnings call yesterday morning,
Hospira now estimates that the ban will shave between $50 million and $100 million off of its top line and 10¢-20¢ from its per-share earnings for the year.
The company had said that it was expecting earnings per share in the range of $2.05 to $2.20, representing 2%-9% growth for the year.
The new prohibitions added to a ban on Hospira’s Symbiq infusion pump, which the company recalled in November 2012 over a touchscreen issue. The FDA gave that recall its highest-risk Class I status over concerns that a software issue may prevent the pump from responding correctly to user selections, and the agency later that month blocked new imports of Symbiq systems into the U.S.
The Symbiq device may stay off the market for the rest of this year, the company said.
"Symbiq, for financial projection purposes, is off market in the U.S. for the full year of 2013 since we can’t project the time line for receiving another round of 510(k) clearance from the FDA," Hospira CFO and finance senior VP Thomas Werner said during the company’s earnings call. "Symbiq, in any given quarter, has represented roughly 10% of [medication management system] hardware sales, so it’s not the lion’s share of the product area but it will have some drag."
There is no word yet on time lines for the other infusion systems that have also been banned.
Hospira has suffered a spate of regulatory issues surrounding its infusion systems and its Costa Rica manufacturing .
Just months before the Symbiq recall, the FDA had chided Hospira over violations at the Costa Rica facility, saying that the company mishandled a September 2011 recall of its Plum infusion pumps.
The FDA cited Hospira for a "failure to identify the actions needed to correct and prevent recurrence of nonconforming product and other quality problems" as well as a "failure to implement and record changes in methods and procedures needed to correct and prevent identified quality problems."
"The Company takes this matter seriously. Any further actions by the FDA could have a material adverse impact on our financial position and operating results," the company said in a recent filing.
The prohibition news put a damper on the company’s latest earnings report, which showed strong sales growth and a swing to the black during the 4th quarter of 2012.
Hospira reported profits of $30.8 million, or 3¢ per diluted share, on sales of $1.10 billion during the 3 months ended Dec. 31, 2012. That represented an 8.4% increase in sales compared to the 4th quarter of 2011, when the company reported $1.01 in revenue and a loss of $212.3 million, or $1.30 per share.
Adjusted for 1-time items, Q4 earnings came to 55¢ per share, beating analysts’ expectations by 4¢.
For the full year of 2012 Hospira reported earnings of $58.8 million, or 27¢ EPS, on sales of $4.09 billion. That’s a 3.5% boost in profits and a 0.9% boost in sales compared with 2011, when the company reported $56.8 million in profit, or 6¢ lost per share, on sales of $4.06 billion.
Adjusted full-year earnings amounted to $2.01 per diluted share, falling 30¢ short of analysts estimates.
