Boston Scientific got a bit of good news Thursday after learning it had received FDA clearance for the two manufacturing changes affecting its cardiac resynchronization therapy defibrillators (CRT-Ds) and implantable cardioverter defibrillators (ICDs). The agency's decision means the company can immediately resume distribution of its COGNIS CRT-Ds and TELIGEN ICDs. Shares of Boston Scientific went up 49 cents, or 7 percent, at $7.63, in after-hours trading after the company made the announcement at the close of the market Thursday, Barron's notes.
The company voluntarily removed the ICDs and CRT-Ds from the market March 15 after discovering it hadn't received FDA approval for manufacturing changes. During a physician conference call held March 29, company officials emphasized that the action wasn't related to patient safety, but a submission process error. The company says it now is evaluating the impact of the ship hold and product removal actions on its financial results and will provide an update with the release of its first quarter earnings.
"We are pleased that the FDA has cleared the manufacturing changes, and that we are again able to offer COGNIS and TELIGEN to U.S. patients and physicians," says Boston Scientific President and CEO Ray Elliott in a statement. "We are committed to doing the right thing every time, and we acted voluntarily, swiftly and appropriately to ensure compliance with all regulatory requirements," he adds.
Boston Scientific acquired its defibrillator operations in 2006 when it bought Guidant for $27 billion. As the New York Times notes, Guidant's reputation was being battered at the time because it hadn't alerted doctors and regulators that some of its defibrillators had a flaw that was linked to patient deaths. Some analysts have been highly critical of the acquisition.
Rival ICD-makers St. Jude Medical and Medtronic could still benefit from Boston Scientific's woes. A recent study conducted March 18-24 by Majestic Research has found that Boston Scientific's decision to withdraw from the ICD market could negatively affect the company's reputation with doctors.