London-based manufacturer Smiths Group said the sale of some of its medical devices has been temporarily suspended in Europe, in advance of the EU Medical Device Regulation (MDR) taking effect in 2020.
The group said one of its third-party providers serving as a Notified Body—which evaluate device conformity with regulations in the European CE marking process—had been decertified for certain products.
In its update to investors, Smiths said that this news, plus the termination of two U.S. contracts, is expected to drag down the division’s revenue by 2% for the full year. The group’s stock price on the London exchange fell more than 7% after the update, wiping out more than £500 million ($649 million) of the company’s value, with some unsure about the regulatory landscape post-Brexit.
The EU MDR, meanwhile, includes new directives for device identification and translation requirements for labeling and instructions for use.
The company did not specify the products that were affected. Smiths Medical’s portfolio covers patient monitors, infusion devices, airway management and other areas.
The division is Smiths’ largest, representing £951 million ($1.24 billion) in revenue in 2017. In May, Smiths confirmed that it was in very early discussions regarding a possible merger between its medical division and ICU Medical, based in San Clemente, California.
The overarching Smiths conglomerate includes four other divisions, which manufacture detectors for explosives, weapons, biohazards and contraband; seals and couplings for the oil and gas industry; electronics and radio components; and components for heating and managing fluids and gases, such as in hydraulic systems.
The group did cite “good underlying growth,” driven by the medical division’s new product launches earlier this year, including an ambulatory infusion pump and connector, as well as peripheral nerve block needles and catheters. In March, Smiths Medical received FDA clearance for a closed-system peripheral IV catheter and began its U.S. commercial launch.