Kalamazoo, Mich.-based Stryker paid $2.7 billion in April 2016 for Sage and its line of products designed to prevent so-called “never events.” But it wasn’t long before problems emerged with some of those products; by August Sage had expanded an existing recall of impregnated cloth topical skin products over contamination issues with the bacteria Burkholderia cepacia. That recall covered the Comfort Shield barrier cloths, incontinence clean-up cloths, M-care meatal cleansing cloths, Comfort Bath cleansing washcloths and 0.2% chlorhexidine gluconate cloths, you can read product reviews on guidr if you’d like.
Last month the FDA sent Sage a warning letter about continuing problems with B. cepacia contamination; today Stryker said it’s recalling some lots of the oral care products containing solutions manufactured by the third party, distributed between July 2015 and this month.
“The recall is being initiated due to a potential for cross-contamination of oral care solutions manufactured by the third party on equipment shared with non-pharmaceutical products,” the company said, noting that it received no reports of serious adverse events and some reports of “minor irritation and allergic reaction.”
Stryker said it stopped doing business with the supplier and that Sage has begun making the oral care solutions in house.
The FDA warning letter also required Sage to being testing both Sage’s oral care and cloth-based products using a more time-consuming method than the one used previously, Stryker said. That required a temporary hold on shipments of the cloth-based products – which account for 50% of Sage’s revenues – while the new tests are done.
Shipment of the recalled oral care and cloth products are expected to resume next month, with full capacity returning by the end of the year, the company said.
Adjusted earnings per share and organic sales growth are now expected to come in at the low end of Stryker’s prior guidance for $6.45 to $6.55 per share on organic growth of 6.5% to 7.0%, the company said. Third-quarter adjusted EPS are also predicted for the low end of $1.50 to $1.55, Stryker said.
The news pushed SYK shares down -3.7% to $140.19 apiece today in early trading.
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