Learn what Wall Street already knows in our "Billion Dollar Secret" guide.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.
If you wish to go to ZacksTrade, click
OK. If you do not, click Cancel.
Back to top
Stryker Corp. ( SYK - Analyst Report) has received a Class I recall of its ShapeMatch Cutting Guides from the U.S. Food and Drug Administration (“FDA”). The recall was issued because the regulatory body claims that the device may have breached the planning ranges mentioned in the 510(k) clearance or was not made according to surgeon’s pre-operative planning parameters.
Manufactured from patient-specific three-dimensional imaging data, the single-use ShapeMatch guides are designed to be exclusively used with the company’s Triathlon knee replacement system. The device had secured the 510(k) approval in May 2011.
The company stopped selling the product from Nov 2012 and had voluntarily recalled it in Jan 2013. Although this is a setback for Stryker’s knee franchise, management believes that it would not adversely affect sales of the Triathlon system or the Triathlon standard instrumentation.
In 2012, revenues from Stryker’s Knee business, under the Reconstructive segment, increased 4% year over to $1,356 million. Although the franchise is benefiting from the GetAroundKnee Direct-to-Consumer campaign, the business segment is likely to face competitive pressure going forward. The highest risk classification from the FDA might adversely affect top-line growth of the knee business.
Recently, in Mar 2013, Stryker had received a warning letter from the FDA following an inspection at its Portage facility at Mich. The warning was issued due to a quality systems-related issue at the facility as well as the marketing of unapproved medical devices, including the Neptune Waste Management system. In Jun 2012, Stryker started a Class 1 recall of its Neptune system due to the severe injuries caused by the device.
Stryker had also globally recalled the Rejuvenate and the ABG II Modular hip stem in Jun 2012 due to some product defaults, which caused adverse local tissue reactions. If such a trend continues, it might lead to a decline in the company’s market share.
Stryker carries a Zacks Rank #3 (Hold). While we remain on the sidelines regarding Stryker, companies like Nuvasive ( NUVA - Analyst Report) and Conceptus , both carrying a Zacks Rank #1 (Strong Buy), as well as CareFusion , which carries a Zacks Rank #2 (Buy), are expected to do well in the medical industry.