Friday March 2, 4:08 am Eastern Time
Sulzer Medica plays down impact of hip recall
WINTERTHUR, Switzerland, March 2 (Reuters) - Sulzer Medica AG's (NYSE:SM - news) recall of faulty artificial hip joints has weighed on U.S. sales of the product in the first two months of 2001, the Swiss medical technology company said on Friday.
But joint prostheses sales rose overall year-on-year, it added in a statement, reiterating it believed that its product liability insurance would cover the cost to date of replacement surgery for patients affected and associated claims.
Non-insured losses to date from the voluntary recall announced in December were more than offset by an exceptional gain of $32 million it booked from a litigation settlement, it added.
Investors were more wary, sending Medica shares to a new 2001 low. Shares were down 5.6 percent at 337 francs at around 0840 GMT in a generally firmer Swiss market, just off a low of 336 that took their decline this year to 21 percent. Medica, which is separately listed but 74-percent owned by Sulzer AG , recalled the hip joints because lubricant residue on the products could prevent them from bonding with bone and make them come loose.
It has apologised and taken full responsibility for reimbursing patients' expenses not covered by their insurance and compensating them for pain and suffering.
More than 17,000 patients -- 90 percent of them in the United States -- have received the product and to date 573 patients have been operated on to receive replacements.
Because loosening normally shows up within three months of surgery, but can take as long as six months, Medica believed the frequency of replacement surgery would soon begin to decrease.
The recall has triggered several lawsuits and Medica said it would fight efforts to combine them into class-action litigation in U.S. courts.
``The company is convinced that patients are better served on a case-by-case basis as every patient who needs a revision is affected differently by the recall,'' it said.
It expressed confidence that claims for punitive damages sought by some plaintiffs would not be awarded as ``the company has acted responsibly and immediately once it learned about its manufacturing problem''.
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