BIPH should dump BSX, too much baggage, IMO.
Boston Sci receives FDA warning
By Val Brickates Kennedy, MarketWatch
BOSTON (MarketWatch) -- The U.S. Food and Drug Administration has warned Boston Scientific it that its Quincy, Mass.-based shipping facility has been found to have serious quality-control problems.
In a letter dated Aug. 10, the FDA said that a recent inspection of the plant had revealed "serious regulatory problems" involving distribution of the company's implantable Vaxcel Low Profile Infusion Ports, Taxus drug-coated coronary stents, and Symmetry balloon dilatation catheters.
The agency, which posted the letter on its Web site Tuesday, said it had conducted the inspection from March 28 through May 20.
In particular, regulators said that Boston Scientific (BSX: news, chart, profile) had distributed batches of the products in question to hospitals despite the shipments having been put on hold due to suspected defects.
Boston Scientific was not immediately available for comment.
The Aug. 10 letter was in response to earlier correspondence with Boston Scientific over the matter, in which the company stated it was committed to improving its quality-control system at the plant. The FDA's letter went on to criticize the company for not providing details or evidence on how it plans to institute change.
"You must promptly initiate permanent corrective and preventive action on your quality system," the FDA wrote in its letter.
"You should know that these serious violations of the law may result in FDA taking regulatory action without further notice to you," the agency added. "These actions include, but are not limited to, seizing your product inventory, obtaining a court injunction against further marketing of the product or assessing civil money penalties."
Shares of Boston Scientific fell 4% to $26.04 in midday trade.
Analysts were mixed on Tuesday as to the gravity of the situation.
"While these regulatory issues are unfortunate, Boston Scientific has had a relatively good track record when it comes to quality control, even in the context of last summer's Taxus recalls," Morgan Stanley analysts wrote in a note Tuesday. The group has an equal-weight rating on the stock.
"Overall, we do not view the issues contained in the warning letter as having a material financial impact on the company over the next three to six months unless Boston Scientific fails to respond appropriately to the FDA's concerns," the Morgan Stanley analysts added.
Analysts at RBC Capital Markets, who have an outperform rating on the stock, agreed. "We do not think the warning letter suggests that Boston Scientific is plagued by any intractable regulatory or quality-assurance problems," they wrote, pointing out that all medical-device companies receive such letters from time to time.
KeyBanc Capital Markets analyst Robert Goldman was more wary.
"While warning letters are commonplace, a two-month inspection is rather long, in our opinion, and does suggest FDA concerns," said Goldman, who has a hold rating on the stock. "We need to speak with Boston Scientific to better gauge this situation."
Cash is King until further notice!!!
My comments on companies are usually my opinion of long term success (years). The PPS may go up or down greatly in the meantime depending on the number of greedy suckers with money.
