It hit the headlines in a dizzy twist on words. The CEO of St. Jude put the cart before the horse in warning investors that he was expecting a warning letter from FDA before one was actually even issued! According to a report on MedCity News, this type of announcement apparently has no precedent. Have you ever heard of a company proactively telling Wall Street they’re going to receive the dreaded warning letter before receiving it- or even a FDA form 483? This was something that was on the mind of analyst Bob Hopkins of Bank of America.
So, what does this mean for our industry moving forward? Is this going to be the new trend- beating FDA to the punch? The CEO of St. Jude, Dan Starks, made comments on how investors don’t like surprises, and urged people to be realistic about the role of warning letters in today’s regulatory arena.
In fact, Starks stated, “Another reason we made the comment is that in the long run, we think it’s good for our markets if the public knows that the FDA is exercising its regulatory oversight of medical device companies in a very rigorous and robust way, and it’s clear to us that FDA is doing that.”
Questions that analyst Hopkins mentions in the article are valid inquiries:
- Did the FDA uncover something and told you about it?
- Have you uncovered something- and wanting to be proactive- notify FDA?
- Why did you make that comment?
There are a lot of curiosities and questions left to be answered. Hopefully FDA will release information soon so the public is aware of the details. After all, the letter hasn’t even been issued yet, as Stark stated, “It’s a risk, and don’t be shocked if that risk is realized.” Reuters also covered the story with the same tone of unanswered questions.
How will this play out on Wall Street? Was this a smart move? Can we expect to see more warning letters and 483’s handled this way? What are your thoughts?
Photo Credit: Mathew Knott