Sientra slides amid implant manufacturing fallout in Brazil

Breast implants--Courtesy of Sientra

Last month, breast implant company Sientra ($SIEN) fell by more than 50% after its sole manufacturer, Silimed, had its CE mark suspended by the U.K. Department of Health. Now the company is dealing with the aftermath, with Brazilian regulators shutting down Silimed's factory in the country and sending Sientra's shares spiraling downward as a result.

Brazilian regulatory agency Anvisa halted the manufacturing of Sientra's silicone breast implants at the facility for precautionary reasons and has not yet determined whether or not the factory was contaminated, Bloomberg reports. The pause will last until the company corrects some issues that Anvisa flagged as not conforming to best practices, the agency told the news outlet. Shares in Sientra dropped on the news, hitting a low of $5.72 in early morning trading on Monday.

The regulatory action comes as Sientra faces the fallout from an inspection gone awry at Silimed's Brazilian factory. In September, TUEV SUED, a company supported by German regulators to inspect manufacturing for products shipped to Europe, found that there were particles on implants in the factory. Silimed could not explain the source of the impurities or remedy the situation, TUEV SUED said at the time, so TUEV SUED suspended three quality-management certificates at the facility through Dec. 17.

The move prompted U.K. and EU health authorities to suspend Silimed's marketing certificate, and also sparked the ire of other regulators. Last month, Australia's Therapeutic Goods Administration identified the particles on the implants as silica and cotton and put distribution of Silimed products in the country on hold pending an investigation, the regulator said at the time. Meanwhile, international and Brazilian specialists are carrying out technical studies to verify the products' safety, Silimed told Bloomberg.

But Sientra is also facing the music stateside. The company voluntarily put sales of its implants on hold in the U.S. while it talks with regulators. Sientra is working closely with the FDA and conducting its own review to resolve the issue as soon as possible, the company told the news outlet.

The news deals a blow to Sientra as it vies for its share of the breast implant market. The Santa Barbara, CA-based company has come a long way since entering the U.S. market in 2012, raising $75 million in an IPO last October to support development of its shape-retentive silicone-gel implants. Sientra also supplies about 7% to 12% of implants in the U.S.

Allergan's Natrelle 410--Courtesy of Allergan

Still, the company faces competition from Allergan ($ACT) and Johnson & Johnson's ($JNJ) Mentor, who are forging ahead with their own products. Allergan markets Natrelle 410, a breast implant that mimics human anatomy and holds its shape over time. Mentor is also making headway with its MemoryShape implants, which it touts as more firm and natural-looking than other products on the market.

- read the Bloomberg story

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