As if the more than $500 million fallout from lawsuits regarding its vaginal mesh devices weren't bad enough, American Medical Systems must now deal with an FDA warning letter on its process validation, risk analysis, and corrective and preventive action procedures at its Minnetonka, MN, facility.
The subsidiary of Endo Health Solutions ($ENDP) has been in contact with the FDA ever since the agency issued three Form 483 observations based on its February inspection of the Minnetonka facility. The company's April 16 Form 8-K with the SEC says that management met with the FDA in March and issued a corrective action plan to be completed by the end of 2015.
"The (warning) letter states that the corrective actions which AMS reviewed with the FDA on March 20, 2014 appear to be adequate, but it goes on to state that many of the actions have not yet been completed and will need to be validated in a follow-up inspection," Endo said in the 8-K.
AMS has 15 days to respond to the warning letter is currently drafting a response, according to the filing. The company said it expects "only limited related impact to its business at this time," and the plant will remain operational.
Failure to correct the violations listed in the warning letter could resulting in penalties ranging from repairs and fines to seizures of products, suspension of production and criminal prosecution.
The warning letter was not posted on the FDA website as of Wednesday.
The devices arm of Endo has proven to be a troubled company since it was purchased for $2.9 billion in 2011. In February, Endo said it is building up a $520 million stash to cover expected fallout from the vaginal mesh lawsuit, and disclosed that the reserve may grow even larger. Endo isn't the only one dealing with packs of vaginal mesh-related lawsuits. Johnson & Johnson ($JNJ), Boston Scientific ($BSX) and C.R. Bard ($BCR) are also facing troubles regarding their products in the space.
AMS sales hit $132 million during the fourth quarter, a tiny drop over last year due to fewer women's health procedures. But the company said men's health sales for the division soared, thanks to a demand growth for its male continence products.
- here's the 8-K