Medtronic Predicts Drop In Sales

Medtronic said today that it expected revenue to fall by as much as $250 million, or 7 percent, as a result of the problems it disclosed Sunday with a crucial component in the most recent model of its heart defibrillator.

Stock in the company, the world’s largest maker of the devices, plunged on heavy volume when trading opened this morning and remained down. It closed down more than 11 percent, at $50.00.

Medtronic announced Sunday that it was urging doctors to stop using an electical lead, or wire, known as the Sprint Fidelis, because it was prone to a defect that has caused malfunctions in hundreds of patients and may have contributed to five deaths.

The wire connects the heart to a defibrillator, a device that shocks faltering hearts back into normal rhythm. The company is urging all of the estimated 235,000 patients with the Fidelis, to see their doctors to make sure it has not developed a fracture that can make the device to misread heart-rhythm data.

Such a malfunction can cause the device to either deliver an unnecessary electrical jolt or fail to provide a life-saving one to a patient in need. In most cases, the defibrillators can be reprogrammed without surgery to minimize the problem.

Although the company says that the Fidelis leads can be replaced, if necessary, with an older version called the Quattro, it said today that it currently does not have enough Quattros on hand to replace all the wires that might prove faulty.

Doctors in many cases could choose to use replacement leads made by other companies. But the biggest long-term financial impact on Medtronic might come not from doctors using other leads but from the possibility that they could switch to complete defibrillator packages from other companies.

Medtronic said today that the biggest financial impact would probably be in Japan, because it does not have approval there to sell its Quattro lead as an alternative to Fidelis. Because Japanese doctors customarily do not mix leads and defibrillators from different companies, Medtronic could lose sales of both leads and defibrillators there.

Overall, Medtronic estimated that about 2.3 percent of patients with the Fidelis lead, or 4,000 to 5,000 people, would experience a lead fracture within 30 months of implantation. Those patients will require a delicate surgical procedure to replace the lead, experts said.

Medtronic said it would stop selling the lead and recall all leads not yet implanted.

Replacing leads on a heart device like a defibrillator is considered by experts to be far more dangerous than replacing the device itself. As a result, doctors said that patients were better off leaving the lead in place except in those instances where it has stopped functioning properly.

The Fidelis lead has been used with Medtronic defibrillators since 2004, and most patients who received Medtronic defibrillators since then have them. Patients who have recently had defibrillators replaced because their batteries were running down may not have the leads because doctors commonly attach replacement defibrillators to the existing leads when possible.

Vice President Dick Cheney uses a Medtronic defibrillator, but it was implanted in 2001, before the Fidelis lead was introduced. The White House declined to comment on Sunday.

Questions about the performance of the Fidelis lead have surfaced before. For example, earlier this year, Dr. Robert G. Hauser of the Minneapolis Heart Institute published an analysis that found, among other things, that a significant number of patients were experiencing “inappropriate” shocks because their defibrillator was firing when not needed. Such jolts can be extremely painful.

Dr. Hauser, who played a central role several years ago in bringing to light malfunctions in defibrillators made by a Medtronic competitor, Guidant, said that he discussed his findings earlier this year with Medtronic officials, who said there was not enough data to come to any conclusions. In March, however, the company issued a letter to doctors sharing those concerns with doctors.

Last month, when 30 months of data showed a continuing fracture problem, Medtronic began talking with its independent medical advisers about what to do next. “The numbers that we saw were not that bad, but they were worrisome, troubling,” said Dr. Douglas P. Zipes, a professor at the Indiana University School of Medicine and a member of the advisory board.

Statistically speaking, there is not enough data to be sure that Fidelis is unusually prone to fracture. But with mounting evidence that there was cause for concern, Medtronic said it decided to act now. Five deaths have been linked to the fractures as a possible, though not confirmed, contributor.

Barry Meier contributed reporting.

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