FDA bans Oridion imports, share prices dive 40%
January 3rd, 2012 // 1:23 pm @ jmpickett
The FDA banned Oridion Systems Ltd. (PINK:ORDNF) from importing any medical devices into the U.S., after the Israeli med-tech maker failed to fix violations at its Jerusalem manufacturing facility.
Shares of Oridion fell 39% on news of the ban, from $11.00 to $6.65 at market opening Dec. 27.
Because of the federal watchdog agency’s import restrictions, Oridion said it expects it will fall short of its 2011 revenue growth guidance, reaching only 17% instead of 20%.
“Oridion is handling this as it handles all FDA matters, and that is with the highest priority. We are confident in the safety and effectiveness of our products and are taking all the steps necessary to ensure that our quality assurance processes are fully in compliance with FDA requirements,” chairman & CEO Alan Adler said in prepared remarks. ” We are working with the FDA to end this situation as soon as possible.”
The import ban comes after nearly 6 months worth of warnings from the FDA. Oridion stepped into the federal watchdog agency’s spotlight in June, when an investigation was launched after Philips (NYSE:PHG) recalled 8 lots of infant and neonatal carbon dioxide sampling lines manufactured by Oridion on concerns that they may contain hair-like plastic strands that infant patients could inhale.
The Israeli med-tech maker was hit with a warning letter from the FDA in October for missing device history documentation and insufficient quality controls at its Jerusalem plant.
The FDA’s warning letter stated that if left uncorrected, the sampling lines may be subject to FDA refusal and “detention without physical examination.”
Oridion said it expects to resolve its issues with the FDA by mid-2012 and added that sales to other parts of the world shouldn’t be affected by the U.S. watchdog agency’s decision.
