Outset Medical faces FDA warning letter over hemodialysis labeling, accessories

Just a few months after getting back on track after pausing shipments of its Tablo hemodialysis system to secure an updated FDA clearance for at-home use of the technology, Outset Medical is facing another potential regulatory setback.

The company received a warning letter from the FDA last week, it disclosed in a Friday filing with the U.S. Securities and Exchange Commission. The letter is a follow-up to the Form 483 that Outset had received in February following an inspection of its facilities; the four issues raised by the FDA in that form have since been “fully addressed,” according to Outset.

The new letter raises an additional two issues the FDA has spotted in Outset’s product offerings. The company now has 15 business days to respond to the agency with a plan to fix the apparent flaws; Outset wrote in the filing that it “intends to fully cooperate with the FDA,” starting by meeting that deadline.

The first of the two issues centers on materials on Outset’s website and elsewhere that promoted continuous renal replacement therapy (CRRT), a slowed-down version of dialysis that takes a full day, rather than just a few hours, to clean out a patient’s blood. The agency took issue with Outset’s promotion of CRRT since its Tablo dialysis system hasn’t been cleared to provide the therapy.

According to Outset, it has already made “labeling and promotional changes” that it believes “effectively” address the FDA’s observation.

The other issue described in the letter, however, will require additional actions from the devicemaker. The FDA claims that Outset’s TabloCart—an accessory to the Tablo system that launched last year and adds 360-degree rotating wheels to the machines—requires regulatory clearance for an optional feature that can provide prefiltration for the water used in dialysate mixtures.

Outset said in the filing that it will “work collaboratively” with the FDA to address the agency’s concerns about the TabloCart, including submitting an application for 510(k) clearance of the cart if necessary.

The company made sure to note in the report that neither of the issues raised by the FDA requires Outset to restrict or halt sales or shipments of the Tablo system in the U.S. It did add, however, that there’s no guarantee the agency will approve of Outset’s responses to the warning letter and that it wasn’t sure how long it may take to fully resolve the issues.

In the wake of Friday’s filing, Outset’s stock price took quite a hit. It dropped below $18 on Monday morning, down about 11% from Friday’s closing price of $20.20.

That’s still well above the all-time lows that Outset reached last year. It plummeted first down to around $13 in June 2022, as the company announced that it would pause shipments of the at-home version of the Tablo system while it awaited expanded FDA clearance. It floated around that level for much of the ensuing months—even though the shipping hold lifted only about six weeks later, sparking a brief return to normalcy—only beginning a more sustained recovery after Outset reported better-than-expected third-quarter results in November.