Globus Medical, Inc. recently received a warning letter from the U.S. FDA following an earlier inspection at the Company’s Audubon, PA facility.
It seems the FDA was not fully satisfied with the company’s response to a list of observations made during the May audit. According to Globus’ SEC filing about the events, the deficiencies relate to its MicroFuse® Putty manufactured between October 25, 2012 and December 20, 2012, specifically mechanical testing of the Putty, procedures to control environmental conditions in a clean room at the Company’s facility, and internal procedures for medical device reporting.
Globus says the warning letter does not restrict its ability to manufacture or seek 510(k) clearance of products. Indeed it is currently addressing the issues and believes that the FDA’s concerns set forth in the warning letter can be resolved without a material impact to the Company’s financial results.
So is it all a storm in a teacup?
Well, probably yes. FDA audits would be peculiar affairs if they rocked up for over a week and found everything to be perfect. On this occasion the surprise is probably that Globus hadn’t nailed the deficiencies more quickly, because now they have a little egg on their corporate face as the industry press such as ourselves feel duty bound to make a big fuss about it.
It seems Globus’ MicroFuse Putty business is pretty small beer to the company too, making up a reported <1% of sales. Yes, the share price is off a bit at $17.21 when we last checked, but earlier this year it was nearer $10, which puts the latest news in perspective.