|Hospira CEO F. Michael Ball|
Devices and software aren't a huge part of Hospira's ($HSP) revenues, but they do comprise the worst performing growth segment within the company. To help turn this around, the company announced a plan to streamline and update its device offerings in May 2013; it's now about halfway to the completion anticipated during the second half of 2015.
Hospira is working to streamline its device offerings, as well as improve quality and consistency. The company has pending 510(k) submissions for two next-generation infusion pumps, Plum 360 and SapphirePlus. The submission for the latter came from infusion pump startup and Hospira partner Q Core.
At a December Investor Day, Hospira said it had about 25% of the $2 billion pump market, giving about a 25% market share.
The company reported $215.5 million in medication management net sales for the second quarter; that category includes software, IV sets and infusion pumps. This segment gained only 0.7% over the same quarter in 2013 and it accounted for about 19% of Hospira's second quarter net sales. Overall, the company had a 10.7% growth in net sales to $1.1 billion for the quarter.
Hospira has had a number of warning letters from FDA regarding pharmaceutical and device manufacturing facilities.
On the device side, CEO F. Michael Ball advised, "Early in the quarter, the FDA inspected our Lake Forest device design and control center. The inspection resulted in a 483 with 6 observations. We submitted our response with an action plan and commitments to address the observations. Late in the quarter, the FDA inspected our Rocky Mount facility. Five inspectors spent two weeks at the plant and I am very pleased to report that this much-anticipated inspection resulted in zero observations."
Investors embraced Hospira on its earnings news, sending the company up 8% on July 30 by late afternoon.