Boston Scientific (NYSE: BSX) is alerting doctors that three of its implantable defibrillators have a defect that can prevent them from working properly. A magnetic switch on the defibrillators can get stuck, stopping the devices from delivering an electric shock to the hearts of patients, the company reports.
In an interview, company CEO Ray Elliott told Reuters that this action is likely the end of the problems associated with the Contak Renewal 3 & 4 and Vitality HE ICDs manufactured between January 2006 and November 2007. They are not sold anymore and are not in hospital inventories. Roughly 34,000 remain implanted in patients, the Wall Street Journal reports.
Goldman Sachs analyst David Roman estimates that 15 percent to 20 percent of the devices would end up being removed at a cost to the devicemaker. "This would clip expected replacement revenue in 2011-2013, which we estimate would reduce projected revenue in each of these years by $40 million to $50 million, or 1 to 2 cents (per share) annually," he writes in a research note, as quoted by Reuters. He adds that the advisory is unlikely to have a direct impact on future sales of initial ICD implants because of ongoing conversion to newer models.
The advisory marks the latest problem for the company's ICDs. Late last year, the company warned that its Cognis and Teligen defibrillators had a design flaw that could result in the devices delivering unnecessary shocks to the small number of patients, the WSJ reports. Then, in March, the company recalled its ICDs after discovering it hadn't received FDA approval for manufacturing changes. Sales resumed a month later, but the company is still trying to regain lost business. Its defibrillator sales fell 17 percent in the second quarter, the WSJ notes.