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Stryker scrutinized

This article was originally published in The Gray Sheet

Executive Summary

Firm is cited for compliance issues related to one of its craniomaxillofacial (CMF) implant products previously sold through its CMF distribution facility in Portage, Mich., in a May 5 warning letter. The company is responding to FDA regarding the citations, Stryker says in a May 11 filing with the Securities and Exchange Commission. Stryker's CMF offerings include its line of Leibinger instruments. The firm is already addressing issues related to three previous warning letters for quality system and compliance violations (1"The Gray Sheet" Feb. 2, 2009, p. 11). In the SEC filing, Stryker also acknowledges receipt of a subpoena from the Attorney General of New Jersey seeking documents related to financial arrangements with clinical trial investigators; other firms also have reportedly been issued similar subpoenas (2"The Gray Sheet" May 11, 2009, p. 9)

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Stryker resolves one of four FDA warning letters: Stryker is one step closer to resolving its ongoing FDA compliance issues now that the agency has lifted one of four warning letters received since March 2007, the company reported Oct. 20. The orthopedic device maker's biotech division received the warning letter, which cited quality system and compliance violations, in April 2008 (1"The Gray Sheet" May 18, 2009). "We view this as an important first step in our goal of resolving all of the outstanding warning letters," CEO Stephen MacMillan said during the firm's third-quarter earnings call. Stryker initiated a three-year, roughly $200 million plan in 2008 to overhaul its quality standards (2"The Gray Sheet" Feb. 2, 2009). "The investments we're making seem to be paying dividends ... but we still have work to do," commented Katherine Owen, VP of strategy and investor relations. Stryker reported third-quarter sales were flat at $1.65 billion. The total includes a 5.5% increase in orthopedic implant sales to $1.02 billion, offset by a 7.7% dip in MedSurg equipment revenue to $637 million. "Clearly, reduced hospital capital spending continues to impact the MedSurg business," which makes up 39% of the company, noted CFO Curt Hartman

New Jersey Attorney General Targets Industry Ties To Clinical Investigators

The attorney general of New Jersey is going after the device industry for failures to disclose possible financial conflicts of interest with clinical trial investigators, and wants FDA to strengthen its enforcement, as well

Ortho Earnings: Stryker Plans Big Compliance Investment In 2009

Stryker will spend between $60 million and $90 million on compliance initiatives in 2009, as it overhauls its quality standards and resolves issues related to three outstanding FDA warning letters

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