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Boston Scientific Shares Dip on Letter News

Aug 23, 2005 | AP

Federal regulators sent Boston Scientific Corp. a warning letter identifying "serious regulatory problems" in medical devices shipped from a Quincy, Mass., distribution plant, including heart stents sent to hospitals despite a quality control problem.

The U.S.Food and Drug Administration's disclosure of the letter on Tuesday sent shares of Boston Scientific down nearly 5 percent in morning trading to a new 52-week low.

A letter to the company dated Aug. 10 said FDA inspectors found "serious regulatory problems" during a nearly two-month inspection in Quincy that ended May 20. The letter cited problems in shipments of the Natick, Mass.-based company's Taxus drug-coated stents Boston Scientific's top-selling product as well as Vaxcel implantable infusion ports used to administer drugs and Symmetry catheters that insert medical devices.

Boston Scientific spokesman Charles Rudnick said on Tuesday the company "is actively working on every point raised in the FDA letter. We've completed corrective action in many areas."

While the company acknowledges shipping products that should not have left the Quincy distribution center, Rudnick said, "It's important to note that in every case pointed out by the FDA we had previously identified the problems discussed by the FDA through our quality control and taken appropriate action."

Rudnick said none of the problems with shipments cited in the FDA letter harmed patients. Eight Taxus stents that were shipped to five hospitals in January, even though they were in a batch that had previously failed to meet quality standards, were returned to the company before they were used, Rudnick said. The drug-coated stents failed to pass a test involving their release of drugs to prevent scar tissue from forming new blockages after artery-clearing surgery.

However, the FDA's letter, posted on the agency's Web site Tuesday, said the problems it cited "may be symptomatic of serious underlying problems in your establishment's quality system."

The letter said "these serious violations of the law may result in FDA taking regulatory action without further notice to you," including such possible steps as seizing product inventory, obtaining a court order to halt marketing of devices, or fining the company.

The FDA said Boston Scientific's response to the inspection findings "fails to address specific system-wide corrective actions that are necessary to bring your facility into compliance."

Rudnick said the Quincy center distributes most of the company's medical devices, which are produced at various manufacturing sites. He said the FDA highlighted only problems at the distribution center, not systemic problems in the company's manufacturing.

Boston Scientific last summer recalled nearly 100,000 units of the Taxus stent and another model not coated with drugs because of a manufacturing defect that the company has since fixed.

Stents are metal-mesh devices that prop open coronary arteries after surgeries to clear blockages.

Boston Scientific shares declined $1.31, or 4.8 percent, to $25.84 in morning trading on the New York Stock Exchange, where the shares had traded in a 52-week range of $26.50 to $40.20.


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