Smith & Nephew Drops After FDA Sends Warning Letter

Smith & Nephew Plc fell in London trading after the U.S. Food and Drug Administration said it sent a warning letter to the British medical device maker about quality control at its German plant.

The London-based manufacturer of artificial knees and hips dropped 9 pence, or 1.3 percent, to 677 pence, giving it a market value of 6 billion pounds ($9.3 billion).

In a letter dated Dec. 21, and posted on its website yesterday, the FDA said its inspectors noted quality control problems with the sterilization of hip implant parts at the company’s Tuttlingen plant during a visit in mid-July. The FDA said Smith & Nephew’s response was inadequate.

Liz Hewitt, a spokeswoman for the company, said the warning has no effect on customers or product supply because Smith & Nephew also makes the parts at plants in Memphis, Tennessee, and Warwick, England. She said the sterilization process noted by the FDA is performed by a subcontractor and that new procedures have been put in place since the inspection.

“We’ve been working with the FDA since the summer,” she said.

Smith & Nephew has not yet received the warning letter by mail, according to Hewitt. The company has 15 days to respond once it receives it, according to the FDA statement. The FDA said it will conduct a follow-up inspection to make sure changes have been made at the plant.

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