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Stryker Resolves FDA Warning Letter

http://online.wsj.com/article/SB10001424052748703691804575254261234664800.html

›By JON KAMP
May 20, 2010

Stryker Corp. resolved another warning letter that the Food and Drug Administration has sent to the company in recent years regarding problems found at various facilities, a company official said Wednesday.

Stryker received the letter in question last year for compliance issues the FDA identified with a craniomaxillofacial, or CMF, product previously sold through a distribution facility in Michigan. CMF products include items used to fix facial fractures and in reconstructive surgery.

Lonny Carpenter, group president for global quality and operations at Stryker, said during an analyst meeting that the letter has been lifted. Warning letters can be expensive to resolve and can put a hold on FDA approval for products related to problems the agency found.

Stryker is wrapping up the second year of a three-year, more-than-$200 million effort aimed at improving its quality and compliance programs. This is the third warning the Kalamazoo, Mich., company has resolved in recent months, leaving just one—for a Cork, Ireland, manufacturing plant—remaining.

Chairman and Chief Executive Stephen MacMillan said Stryker is "thrilled" to resolve this letter but also said "our journey is far from over" on the quality front. He said companies can make a mistake of thinking their work is done just because letters are resolved.

The company reiterated its 2010 guidance for sales growth of 5% to 8% excluding currency, although Chief Financial Officer Curt Hartman said the shift in the dollar's value compared to the euro has turned into a headwind rather than a tailwind, as estimated last month.

The company also continues to target per-share earnings this year in a range of $3.20 to $3.30 a share. That represents 8% to 12% growth from last year.

Mr. MacMillan, meanwhile, said Stryker isn't going to give long-term forecasts in this environment. But he said the company's aim is to grow at above-market rates compared with the broader medical-technology sector. [Actually, this was more of a promise than an aim.]‹