Stryker Rejuvenate’s Mounting Lawsuits Hurt Second-Quarter Profits

stryker_profits_hurting_lawsuitsStryker’s recalled Rejuvenate metal hip implant devices struck the device maker a substantial financial blow to its second-quarter profits.

Along with a 35 percent drop in second-quarter profits of about $170 million, Stryker’s earnings outlook for this year are also expected to experience a hit, During a recent conference call with investors, new CFO, William Jellison, said that, “The most significant non-[generally accepted accounting principles] adjustments in the quarter, primarily related to a $170 million increase in the charge [were] associated with the voluntary recall of the Rejuvenate and ABG II modular hip stems. The adjustments also included an increase of $19 million for estimated settlement expectations for previously disclosed regulatory issues. We believe these are reasonable estimations of our exposure. However, no potential insurance offset that may be available to help cover some portion of the Rejuvenate recall has been included.”

Meanwhile, we recently wrote that Boynton Beach, Florida, orthopedic surgeon, Dr. Robert Zann, said he has been removing artificial Stryker hips from patients who are suffering from metal contamination and other injuries related to the now-recalled devices. For the past two years Zann said he implanted the Stryker Rejuvenate and ABGII modular hip systems to repair 400 joints, according to The Palm Beach Post. In the past year, Zann has removed 100 of the defective systems and expects to remove another 100 devices.

Zann said he is sees blood contamination and fluid-filled, painful masses in the area of the joint device in his patients. He believes that the Stryker Rejuvenate and ABGII hip prosthesis recall will be remembered among the most serious medical device failures in recent years. In fact, said The Palm Beach Post, the revision rate could reach or exceed 50 percent since its approval in 2009.

“When I start operating, it is the same mess in them, every single one,” Zann said, describing a “high-pressure fibrous tumor-like pocket” that is full of fluid to the point in which the mass “pops” when cut. Zann also described inflamed muscle, and white, milky fluid surrounding the joint, The Palm Beach Post said.

Revision surgery to explant or remove a defective device is a complex, painful, and costly procedure. Zann said the operation wears on the surgeon, as well. “We are exhausted right now. This is wearing us down. This is really wearing us down,” Zann told The Palm Beach Post. A revised device may perform worse than the original, removed device, say surgeons, due to issues involving bone loss.

We recently wrote that Stryker was asked to cover Rejuvenate him implant monitoring costs for Florida patients following a request made in a purported federal class-action lawsuit filed over the Rejuvenate device. Stryker recalled its Rejuvenate implants in July 2012 and, earlier this year, advised patients implanted with the Rejuvenate to speak to their surgeons about checking the implant for problems, according to court documents, said previously. The documents also cite a “risk of fretting and corrosion at the modular neck junction.”

Zann said that he is removing a recalled Stryker system one time per every five surgeries he performs and his office has been overrun with patients implanted with the Stryker devices who have responded to his warning letters asking them to come in for an MRI and metal testing, said The Palm Beach Post. “This has been the worst year of my life,” Zann said. “I’m so frustrated I can’t tell you.”

More than 80 lawsuits have been filed in New Jersey’s Bergen County, alone, which is where Stryker is based, said The Palm Beach Post. Another 30 have been filed in federal court and more are expected.

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