Covidien PLC’s voluntary recall of more than 600 Orange County-manufactured aneurysm devices will be a slight hit on its top line, according to industry watchers.
The company is a diversified device maker domiciled in Ireland and primarily operating from Mansfield, Mass. It employs about 670 workers in the Irvine Spectrum area.
Covidien announced April 11 that it would voluntarily recall 32 of its Pipeline embolization devices and 621 Alligator retrieval devices. The devices are made at Covidien’s manufacturing plant in Irvine.
Pipeline restores natural blood flow past wide-neck brain aneurysms, or artery ballooning. Alligator retrieves foreign bodies from arteries in the brain.
Covidien said in a news release that it was recalling the devices because internal testing found a coating applied to Pipeline and Alligator could come off and potentially cause stroke or death.
The device maker said it hasn’t received injury reports due to the coating.
The affected devices were manufactured and distributed between May 2013 and March. They were sold in North America, Europe, Latin America and Australia.
The device maker said it let its customers know about the recall through an April 1 letter and that it’s arranging to replace the affected devices.
Covidien isn’t expected to see a major revenue hit from the recall, according to analysts.
“It sounds like [Covidien] has identified a way to address the manufacturing issue, and also noted that it has non-affected lots of the products in inventory which should enable the company to meet demand over [the next quarter],” Richard Newitter and Ravi Misra, who follow Covidien for Boston-based Leerink Swann LLC, said in a research note.
Newitter and Misra wrote that they spoke with Covidien executives and that they don’t believe the recall will have any affects lasting longer than a quarter or two. They estimated that Covidien, which had sales of $10.2 billion and profit of $1.6 billion in the 12 months ended Sept. 30, would lose about $10 million in the three months beginning July 1.
Covidien has increased its OC presence in the past four years. It opened a research and development factory at 9 Parker in the Irvine Spectrum in late April 2012 for its neurovascular unit.
The Irvine neurovascular operation, besides aneurysm devices, handles design of Covidien devices used to treat conditions such as hemorrhagic and ischemic strokes.
Covidien made its first large move into Orange County in 2010 when it spent $2.6 billion to buy Ev3 Inc., a Minneapolis-based device maker that had about 300 local workers at the time.
OC Device Leaders Join CHI Board
Executives at Allergan Inc. and Edwards Lifesciences Corp., two core Irvine-based members of the region’s life sciences industry, were recently added to the California Healthcare Institute’s board.
Allergan President Douglas Ingram and Donald Bobo Jr., Edwards’ corporate vice president, heart valve therapy, are two of five directors added to the La Jolla-based institute’s board.
The institute is a nonprofit public policy research organization that represents academic institutions, device makers and drug makers, among others.
Ingram became president of Allergan last July. He was previously the Botox maker’s executive vice president and president of its Europe, Africa and Middle East region.
Bobo has served in his position since 2007 and joined Edwards in 1995, when it was still part of Chicago-based diversified drug and device maker Baxter International Inc.
Kareo Gets New CFO
Tom Patterson is the new chief financial officer for Irvine-based Kareo Inc. He replaces Jason Gardner.
Kareo, a venture-backed company, provides cloud-based billing and practice management software over the Internet for small medical practices.
Patterson comes to Kareo after spending two years at Garden Grove-based Teletrac, a “software as a service” company that assists in fleet management. Kareo said his background also includes more than nine years with Irvine-based Quest Software Inc. in several roles, including vice president of finance, and more than six years in finance and operational leadership roles at Citrix Systems.
Bits & Pieces
Fountain Valley-based Hyundai Motor America’s Hyundai Hope on Wheels, a pediatric cancer nonprofit organization, said it granted $2 million to the Philadelphia-based Children’s Oncology Group. The money will help the medical group collect biospecimens from children with cancer at its institutions across the country, according to the organization. … Lake Forest-based Tenex Health Inc. appointed Al de Molina and Gary Holmes to its board of directors. Tenex develops surgical devices to treat tendon pain. De Molina is a former chief executive of GMAC/Ally. Holmes is chief executive of CSM Corp.
