Invacare (NYSE:IVC) has a few more items to address before winning certification for its Ohio facility, a 3rd-party auditor told company executives.
Although the company has made "significant progress" in addressing the FDA’s quality control concerns, Invacare remains under a consent decree that has since last year limited its research, development and manufacturing abilities.
The latest audit, the 3rd under the FDA’s watchful eye, was focused on the "sustainable compliance of the company’s updated complaint and risk review processes," auditors told Invacare executives during a Dec. 20th meeting.
During the course of the consent decree Invacare overhauled its complaint management process, now funneling all complaints through a single system, resulting in a backlog as the company wasn’t able to hire and train new members quickly enough to handle all the complaints in a timely manner. New procedures were put in place and more contractors were hired to help "achieve and demonstrate sustainable improvement," according to an Invacare press release.
"We are formalizing an action plan to address the observations of the 3rd-party expert, who we would expect to return in February to commence their re-audit of the quality system," president and CEO Gerald Blouch said in prepared remarks. "While we are disappointed that the final certification report is not ready to be filed, we have made significant progress in our quality systems improvements over the past 2 years."
The company plans to issue an update alongside its end-of-the-year earnings report, Invacare said.
Invacare has since last year been operating under an FDA order that temporarily shuttered 2 manufacturing facilities and forced the company to divest its medical supplies business. The FDA in December 2012 said that it had flagged problems with Invacare’s quality control system over 7 inspections since 2002, "along with failures to properly report adverse events to the agency."
Invacare’s corporate headquarters and a wheelchair manufacturing facility were largely shut down and ordered to undergo 3rd-party inspections to demonstrate compliance with FDA manufacturing guidelines. The device maker managed to eke out a modest profit in Q2, despite struggling through a year that CEO Gerald Blouch called "1 of the most challenging in the company’s history."
The Elyria, Ohio-based medical device company earlier this year beat Wall Street expectations for its 3rd quarter, posting a 5.6% decrease in sales and a giant 462% boost to the bottom line compared with the same period last year.
Invacare shares have gained significantly over the course of the year, up more than 40% as of the end of the day Dec. 26th, compared with the 1st trading day of January 2013.
