St. Jude Medical ($STJ) is confronting yet another problem with faulty leads.
The company said late Wednesday afternoon that it has stopped selling its QuickSite and QuickFlex left ventricular leads for cardiac resynchronization therapy devices after confirming at least 39 cases of worn insulation. St. Jude said no patients were injured, but that there are likely more cases because the wire defect doesn't affect how the CRT device performs. (It is also notifying doctors with a voluntary letter.) Investors weren't happy, and drove the stock down nearly 5%, to $41.67 at the close of trading, Reuters reported.
In a similar problem, St. Jude stopped selling its Riata defibrillator leads in December 2010, cautioning doctors with a similar letter about insulation defects. A subsequent study identified further safety defects with the wires, and FDA officials issued a Class I recall, the most serious category.
St. Jude tried to reassure investors with a statement noting that failure of the two CRT leads would not have affected the device's performance, because the other remaining leads would keep it functioning. Another reality check: More than 171,000 of the leads have been sold. However, St. Jude cautions that as many as 3% to 4% of the leads in operation may end up being faulty, based on its analysis of returned leads and fluoroscopic images of leads still inside patients.
Goldman Sachs analyst David Roman told Reuters that QuickSite and QuickFlex don't contribute much to St. Jude's bottom line, generating about $13 million in annual sales. But, he warned, the latest lead problem will force investors to become increasingly concerned about "the company's overall lead safety profile."
Meanwhile, the company said it will continue to sell its QuickFlex u and Quartet left ventricle CRT leads, which have not yet generated any reported problems.
- here's St. Jude's announcement
- read the Reuters story