We covered quite extensively the evolving tale of the dispute between St.Jude Medical and Aortech, the Scottish-based supplier of the coating for Durata ICD leads. That was all resolved back in late December with some money changing hands and neither side claiming victory.
Meanwhile, on headache number two, St.Jude knew it was likely to get a stiff letter from the FDA relating to shortfalls in its quality system processes, and that’s now happened.
Back in November we wrote about St.Jude’s troubles in our piece “St.Jude on FDA’s naughty step again over Durata“. In that article we linked to the FDA’s inspection notes following visits undertaken to the Durata plant in September and October of 2012. At the time it was pretty clear that you don’t just get a list of failings from the FDA… at some point it’ll turn into a warning letter. And so it has come to pass that late last week the agency provided such a thing. We don’t have sight of it yet, but St.Jude has published its SEC filing, which is the vehicle it needs to use to inform shareholders of events that may impact on the company and consequently its stock price.
The filing can be found here, but cutting to the core of the tale, St.Jude is sounding pretty confident in can rectify the issues highlighted in the warning letter. That should indeed be the case, because most were procedural shortcomings. However the FDA missive is obviously a pretty stern affair because St.Jude points out that the agency has stated it will not grant requests for exportation certificates to foreign governments or approve pre-market approval applications for Class III devices to which the quality system regulation deviations are reasonably related until the violations have been corrected.
What does that mean for Durata? Seemingly nothing according to the SEC filing. Indeed the company claims resolving the FDA’s concerns will have no material impact on its already stated financial expectations. And it looks like the markets are buying that story as St.Jude’s share price continues its steady climb, now 24% up since late November.
Source: St.Jude Medical, Inc.