Beckman Coulter Inc. has formed an executive team to address problems with a profitable heart disease test and expects to start selling it again by next summer.
The company, which makes testing machines and chemicals used by hospitals, labs and researchers, put together a team of executives to look into problems related to a test that detects a protein in blood after a heart attack.
Brea-based Beckman recalled the test in March after Food and Drug Administration regulators said the company made unapproved changes to it that resulted in skewed, higher readings.
Beckman isn’t commenting on what changes were made to the test.
The executive team is looking into what went wrong and how to fix it, according to Paul Glyer, Beckman’s senior vice president of strategy, business development and investor relations and communications.
“We wanted to look at everything and really do a lot of self-examination of the way we function,” he said.
The team is split into four subgroups and is looking at quality issues, ways to improve Beckman’s tests, customer service and practices within the company, Glyer said.
The team’s work is ongoing.
Meanwhile, Beckman is working toward having its troponin test back in use with its machines by next summer, give or take three months.
Resuming sales of the test requires FDA approval.
“We expect our filing with the FDA in the first half of next year,” Glyer said.
Beckman plans to make two separate filings for the test, one each for its Access and DxI testing machines—workhorses used by hospitals and labs to run tests for doctors.
The company now is in the first phase of a new clinical trial, spokeswoman Mary Luthy said.
The process is expected to be shorter and less costly than a typical drug trial, according to Glyer.
“But we still have to prove clinically that what we claim actually is substantiated with statistics,” he said.
The test’s complexity has made fixing the problem difficult, something Chief Executive Scott Garrett underscored during the company’s second-quarter earnings call in July.
“Let me be very specific,” he said. “Troponin is a unique assay and therefore we have more severe consequences due to a problem with (it) than we might have with virtually any other that we have.”
Beckman first detected problems with the test, which led to the FDA issuing a recall. The company found higher readings after adapting the test for use on its DxI machine.
The test is a small part of Beckman’s sales, making up $60 million of its $3.3 billion in sales last year. But the recall is seen as having a big impact on profits this year.
In July, Beckman cut its 2010 profit forecast to a range of $278.3 million to $285.4 million from an earlier projection of $307 million to $321 million.
The company’s revenue forecast went from $3.75 billion to $3.85 billion to $3.65 billion to $3.7 billion.
Handicapped
With the troponin test out of commission, Beckman’s been handicapped in selling its testing instruments, according to John Sullivan, an analyst with Boston-based Leerink Swann LLC.
“Our view is that with several large and well-funded core lab equipment competitors poised to take advantage of (Beckman’s) missteps, winning new business with a key assay omitted will be a high hurdle,” Sullivan said.
Rivals include Roche Holding Ltd., Siemens AG and Abbott Laboratories.
Beckman doesn’t dispute its sales challenge. It will be hard to win new customers “until we get to an unambiguous cleared status” with troponin, Glyer said.
Sullivan, who recently met with Garrett, Glyer and other executives, gives them good marks for their handling of the episode.
“Management set a serious and urgent tone in describing (Beckman’s) response to today’s broad quality issues,” he said.
Beckman’s soul searching has detected issues and brought fixes to other tests as well.
Sullivan wrote that Beckman executives told him that their review of tests for sodium and glucose levels found “minor and resolvable quality issues.”
Beckman is changing those tests and plans to seek regulatory approval for the changes, Glyer said.
“In the meantime, those tests are still on the market and our customers are still operating with them, but with certain additional things they need to do to make the tests fully functional for them,” he said.
The company and others face heightened FDA scrutiny from the troponin ordeal, according to one analyst.
Beckman “indicated that it believes the FDA will continue a close watch on products in the diagnostic industry and (it) expects product corrective actions to continue to be announced,” Quintin Lai, an analyst with Milwaukee-based R.W. Baird & Co., wrote in a report.
