St. Jude Medical‘s (NYSE:STJ) shares dropped more than 4% yesterday after the FDA ordered the medical device company to run a 3-year surveillance program of its recalled Riata defibrillator leads, plus 3 other leads that are still on the market.
STJ shares closed at $36.87 yesterday afternoon, down 4.4% on the day, but opened up slightly at $37.31 this morning. The stock has hovered around that mark so far this morning on Wall Street, reaching $36.96 as of about 10 a.m.
Yesterday afternoon the FDA ordered St. Jude to launch the 3-year post-market review of the recalled Riata and Riata ST leads, as well as for its QuickFlex LV CRT, QuickSite LV CRT, Riata ST Optim and Durata leads.
St. Jude has worked hard to distance its other leads, especially the Durata, from the high-profile Class I recall of the Riata leads in December 2011. The company recalled the devices, citing reports of high rates of "insulation abrasion," which occurs when the leads’ wires wear through their insulation. St. had Jude begun pulling the devices from shelves a year earlier over the same concerns.
"The majority of Riata and Riata ST leads, including those that show signs of electrical conductor migration or externalization, continue to function normally and provide life-saving support for patients," FDA medical devices chief Dr. Jeffrey Shuren said yesterday in prepared remarks. "However, the agency does not have enough information to determine the frequency and timing of insulation failure in these leads; therefore, the post-market surveillance studies will ensure that health care professionals and patients get the data they need to better guide clinical management decisions."
The watchdog agency ordered St. Jude to collect data on the number of patients with insulation failure and whether the failures were detectable with X-ray imaging, as well how soon after implantation the leads failed, the time between implantation and failure and adverse events associated with treatment for failing leads.
The federal watchdog agency further advised that all patients with the recalled Riata leads undergo X-ray or other imaging to look for abnormalities in the wires that may lead to further problems.