Immucor Gets FDA Notice

The Food and Drug Administration (FDA) issued Immucor (BLUD - Analyst Report) a notice of intent last Thursday to rescind the biologics license for two of its products – Reagent Red Blood Cells and Anti-E (Monoclonal) Blood Grouping Reagent. This is an administrative action by the FDA following an early January 2009 inspection. However, the FDA has not recalled any product of the company. Immucor has to reply to the FDA within 10 working days and present a remediation plan within 30 days.

Immucor is presently undergoing the Quality Process Improvement Project. The project was initiated during the third quarter of fiscal 2009 to improve the quality systems and processes of the organization, including the deficiencies, identified by the FDA. The company has already spent over $2 million during fiscal 2009 on the project and expects to spend another $4.0–4.5 million during fiscal 2010. The project is expected to be completed during the third quarter of fiscal 2010. Immucor has kept the FDA updated on progress of the project on a monthly basis, which the latter has duly acknowledged. The company intends to use the undergoing remediation work to facilitate its response to the FDA.

Immucor's share price collapsed to a 52-week low of $11.24 on Friday following the announcement, before recovering to $13.80 – down 14% from previous day's close. We continue to maintain our Buy recommendation for BLUD.