Credit: Shutterstock photoMedtronic plc.MDT has initiated a voluntary product recall of all unused units of its StrataMR adjustable valves and shunts based on an increase in the product complaint rate. Shares of the company registered a 0.05% drop following this announcement.
As of Apr 1, 2017, the product complaint rate was 2.75% of total units of StrataMR distributed. In this regard, we note that this neurosurgery product is part of Medtronic's Brain Therapies division within its Restorative Therapies broader group.
StrataMR works for the management of hydrocephalus and helps in controlling the flow of cerebrospinal fluid being drained from the brain to relieve intracranial pressure.
However, the problem which led to this product recall was that post-implantation it can lead to under-drainage of cerebrospinal fluid. This may result in health consequences like headaches, nausea, vomiting and lethargy. If left untreated, this can lead to coma and death. According to the company, there already was a death, although the reason behind is not confirmed yet.
Taking into consideration the huge number of disputed units of StrataMR already rolled out, we believe this product recall may impact the company's top line in the ongoing quarter. As of the date of initiation of this recall, there were already 2,622 StrataMR valves and shunts distributed globally. These are going to be potentially affected by this recall.
Medtronic initiated customer communication of the recall by a letter and requested customers to stop using the affected products that remain in inventory and return all unused units to Medtronic. The U.S. Food and Drug Administration (FDA) and other regulatory bodies also have been notified.
Shares of Medtronic traded below the Zacks categorized Medical - Products industry, over the past one month. The stock declined 3.05%, wider than the broader industry's loss of 1.05%.
Zacks Rank & Key Picks
Medtronic currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader Medical space include Inogen, Inc. INGN , Orasure Technologies, Inc. OSUR and Hill-Rom Holdings, Inc. HRC . While Inogen sports a Zacks Rank #1 (Strong Buy), Orasure and Hill-Rom carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Inogen gained 62.2% in the last one year compared with the S&P 500's gain of 15.1%. The company reported a stellar four-quarter positive average earnings surprise of over 49.08%.
Orasure surged 73.9% in the last one year compared with the S&P 500's gain. Its four-quarter average earnings surprise was a positive 123.5%.
Hill-Rom gained over 33.9% in the past one year, better than the S&P 500 mark. It posted a trailing four-quarter positive average earnings surprise of 12.03%.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Inogen, Inc (INGN): Free Stock Analysis Report
Medtronic PLC (MDT): Free Stock Analysis Report
OraSure Technologies, Inc. (OSUR): Free Stock Analysis Report
Hill-Rom Holdings Inc (HRC): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
