COCHLEAR FALLS 27% ON NUCLEUS 5 IMPLANT RECALL
September 25th 2011 22:14
Monday September 12, 2011
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COCHLEAR
Cochlear fell as much as 27 percent on the voluntary recall of the Nucleus 5 range of implants following an increase in the number of Nucleus CI512 failures.
Cochlear chief financial officer Neville Mitchell told Biotech Daily that the Nucleus C1512 was the main product in the 2009 released Nucleus 5 range, which had grown to 70 percent of implant revenue and more than 50 percent of total revenue.
In August Cochlear said implants accounted for $648 million in revenue, with sales of 24,661 Cochlear implants, implying the Nucleus 5 was responsible for about $453.6 million in revenue (BD: Aug 9, 2011).
Mr Mitchell said that Cochlear implants comprised 75 percent of the company’s total revenue with bone anchored hearing aids (Baha) and upgrades making up the rest.
Cochlear said it was with “an abundance of caution” that it recalled those hearing implants, that were not yet implanted, with less than one percent of CI512 implants failing since the launch in 2009.
The company said that if failure occurred “the implant safely shuts down without injuring the recipient”.
Cochlear said it was notifying healthcare professionals and regulatory authorities.
Mr Mitchell said that the company did not know the root cause of the problem.
He said that the Nucleus 5 range incorporated more than 50 innovations in design and manufacture.
The company said that in the event of a Nucleus CI512 series implant failure, recipients could be re-implanted with the previous model, Nucleus Freedom implant range, but said that all existing recipients with a Nucleus CI500 series implant could continue to use their system as normal.
Mr Mitchell said there were “adequate supplies at this stage” of the Nucleus Freedom.
Cochlear said the Nucleus CI500 range included the generally available CI512 as well as the Nucleus CI513, Nucleus CI551 double array implant and Nucleus ABI 541 Auditory Brainstem Implant which were “only available in limited [geographical] markets”.
The company said the recall did not affect any previous implant models including the Nucleus Freedom range and the Nucleus 5 external devices such as the Nucleus CP810 and any previous generation externals were not subject to this recall.
Cochlear said the latest Nucleus 5 CP810 sound processor was fully compatible with Nucleus Freedom implants so recipients could “continue to receive all the functionality the latest Nucleus 5 system offers through this combination”.
“Cochlear takes reliability extremely seriously and all necessary measures are being implemented to address this unexpected occurrence,” the company said.
Cochlear said the financial impact of the recall was “difficult to predict at this stage”.
Cochlear fell $19.41 or 26.9 percent from $72.18 to a low of $52.77 on the news and closed the day down $14.68 or 20.3 percent to $57.50 with 2.7 million shares traded.
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