FDA slaps most serious label on Stryker's surgical recall

Stryker ($SYK) has recalled its ShapeMatch Cutting Guides over manufacturing concerns, and now the FDA has assigned a Class I tag to the effort, warning that the devices could lead to serious injury or death.

The guides, used in total knee replacements, may have been manufactured outside of the planning ranges specified in their 2011 FDA clearance. Stryker informed surgeons to stop using them in November and launched a voluntary recall in January, warning that ShapeMatch could result in patients' knees not functioning properly.

The recall affects just the single-use cutting guides and not Stryker's Triathlon Knee System.

The FDA reserves the Class I label for recalls it deems most serious, and the agency asks patients and physicians to report any adverse events stemming from recalled devices through its online MedWatch system.

Stryker has struggled with regulators over the past year, receiving an FDA warning letter over how it handled the recall of its Neptune waste management devices and spending about $133 million in the fourth quarter to deal with the fallout over Rejuvenate and ABG II, two all-metal hip implants yanked off the market last year.

The company has said the cost of litigation and revision surgeries related to the hip recalls could swell to $390 million when all's said and done.

But Stryker still has faith its orthopedics business can drive revenue growth. The Michigan devicemaker posted a 6.7% jump in reconstructive sales last quarter, and the company closed a $764 million buyout of Chinese ortho company Trauson Holdings, an acquisition Stryker expects to boost its worldwide sales of hip and knee replacements.

- read Stryker's announcement

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