The Santa Barbara, Calif.-based medical aesthetics company’s losses widened 38.1% to -$24.6 million, or 86¢ per share, on sales growth of 71.9% to $19.0 million for the three months ended Dec. 31, 2018, compared with Q4 2017. Analysts on Wall Street were looking for losses of -68¢.
Full-year losses were up 29.0% to -$82.6 million, or -$3.25 per share, on sales growth of 86.4% to $68.1 million compared with the prior year, Sientra said. Breast implant sales are expected to grow by at least 25% to $26 million this year, chairman & CEO Jeff Nugent said, taking into account softness during the first and second quarters around the risk that the March 25 meeting of the FDA’s General & Plastic Surgery Devices advisory panel will recommend restrictions on textured breast implants.
Although the FDA’s warning about the risk of a form of lymphoma associated with textured implants goes back at least two years, recent developments have pushed the issue into the spotlight. For years the safety watchdog’s “summary reporting” policy allowed medical device manufacturers to lump hundreds of adverse event reports into a single filing, meaning that the reported rate of bad outcomes – including deaths – was kept artificially low. From 2008 to 2015 there were only 200 reports stemming from breast implants.
But in 2017 the FDA began requiring companies to report each adverse event on its own. As a result, the agency received more than 4,000 breast implant injury reports in the second half of that year and another 8,000 during the first half of 2018.
Then, last December, Allergan yanked its textured breast implants from the European market after French regulators declined to renew its CE Mark approval until the company submitted more data on the lymphoma risk. And in February the FDA revealed 457 reports of unique cancer cases related to breast implants since 2010, including nine deaths, and announced its plans to convene the plastic surgery panel to consider breast implants.
Nugent said he expects the meeting to help settle investors’ nerves.
“Look, we’re very familiar with the history associated with breast implants. Using history as our guide, we believe that there will be a responsible action taken by the FDA that, at the end of the day, will reduce the uncertainty about the risk associated, that we believe will pick up procedures in the back half of the year,” he told analysts during a conference call yesterday. “There’s a significant amount of uncertainty associated with the risks that we are expecting to be clarified, mitigated to a significant extent in the back half.”
Still, the soft forecast and the earnings miss combined to push SIEN shares down -24.% to $8.55 apiece today in early-afternoon trading.