Cochlear Ear-Implant Recall Costs May Reach A$150 Million
Cochlear Implant Recall, Cochlear Implant Helpline
Oct. 18 (Bloomberg) — Cochlear Ltd., maker of the world’s best-selling ear implant, said costs from a voluntary recall of one of its hearing devices may reach A$150 million ($152 million). The shares fell the most in two weeks.
Recall-related costs will be in the A$130 million-to-A$150 million range, Cochlear Chairman Rick Holliday-Smith said in speech notes prepared for today’s annual meeting in Sydney. That’s more than the A$100 million estimated by UBS AG in a report yesterday. The after-tax cash cost of the provision may be A$20 million to A$30 million, the company said.
Cochlear, formed 29 years ago to develop a so-called bionic ear invented by Melbourne researcher Graeme Clark, aims to maintain its A$1.20-a-share dividend, Holliday-Smith said. The shares have lost 26 percent of their value since Sept. 11, when Cochlear said it was recalling its Nucleus CI500 range because of an increase in failures of its CI512 units.
“Statistically the recall is still accelerating, and may increase three fold yet,” UBS health-care analysts Andrew Goodsall and Dan Hurren said yesterday. They estimated a 4 percent decline in per-share earnings in the year ending June 2012 and reiterated their “sell” rating on Cochlear shares.
Cochlear ended trading down 1.8 percent at A$53.54 on the Australian stock exchange, the biggest decline since Oct. 4. Before the recall, Cochlear had about 70 percent of the global market for hearing devices implanted in the snail shell-like part of the inner ear.
Of 20 cochlear-implant surgeons surveyed globally, 85 percent indicated Cochlear’s reputation was little or untarnished by the recall, Nomura Holdings Inc. wrote in a report today.
“We are more confident that Cochlear’s reputation in the market is not as damaged as we had feared,” Nomura health-care analysts David Stanton and Zara Lyons said.
Switzerland’s Sonova Holding AG is Cochlear’s second- largest competitor with about 15 percent of the market, Nomura said last month, adding that potential recipients and surgeons were more likely to use cochlear implants from other suppliers.
“So far, we’ve seen minimal impact on market share,” Cochlear Chief Executive Officer Chris Roberts said in a phone interview today. “We’ve got a strong position that we can defend.”
Rather than switch to an alternative supplier, surgeons have instead used Cochlear’s CI24RE implants, Roberts said.
The company plans to fund the cost of the recall with cash, and increased a loan facility with Westpac Banking Corp. by A$50 million in case additional funding is needed to maintain the current level of dividend, Roberts said.
More details of the cost of the recall will be announced in February, when the company reports first-half earnings, Holliday-Smith said. Items related to the recall will be accounted for in the period ending Dec. 31, he said.
Checks on the recalled products found failures were caused by a malfunction of one of four electronic components due to moisture entering the device via a breach in the hermetic seal. The malfunction causes the implant to shut down as it can no longer receive information and/or sufficient power from the unit’s sound processor, the company said.
“We regret the difficulties it has created for so many of our stakeholders, but it was the right thing to do especially when our primary consideration is always the welfare of our recipients and our long term reputation,” Holliday-Smith said.
The Class Action Lawyer Network Cochlear Implant lawyers are currently evaluating and accepting Cochlear Implant Injury and Recall cases in all 50 states. If you or somebody you know has been injured by a defective Cochlear Implant, you should contact our Cochlear Implant lawyers immediately for a free case consultation.
–Editors: Jason Gale, Terje Langeland
To contact the reporters on this story: Natasha Khan in Hong Kong at Nkhan51@bloomberg.net
To contact the editor responsible for this story: Jason Gale at email@example.com
FDA Report on Risks of the Cochlear Implant
Risks from the Surgical Implant Procedure
Injury to the facial nerve –this nerve goes through the middle ear to give movement to the muscles of the face. It lies close to where the surgeon needs to place the implant, and thus it can be injured during the surgery. An injury can cause a temporary or permanent weakening or full paralysis on the same side of the face as the implant.
Meningitis –this is an infection of the lining of the surface of the brain. People who have abnormally formed inner ear structures appear to be at greater risk of this rare, but serious complication. For more information on the risk of meningitis in cochlear recipients, see the nearby Useful Links.
Cerebrospinal fluid leakage –the brain is surrounded by fluid that may leak from a hole created in the inner ear or elsewhere from a hole in the covering of the brain as a result of the surgical procedure.
Perilymph fluid leak –the inner ear or cochlea contains fluid. This fluid can leak through the hole that was created to place the implant.
- Infection of the skin wound,.
- Blood or fluid collection at the site of surgery.,
- Attacks of dizziness or vertigo.ngitius form cochle
- Tinnitus, which is a ringing or buzzing sound in the ear.
- Taste disturbances as the nerve that gives taste sensation to the tongue also goes through the middle ear and might be injured
- Numbness around the ear.
- Reparative granuloma –this is the result of localized inflammation that can occur if the body rejects the implant.
- There may be other unforeseen complications that could occur with long term implantation that we cannot now predict.
There other risks associated with the Cochlear Implant sited in the FDA report but, the ones listed above appear to be the most serious Cochlear Implants complications.
People of all ages have been implanted with these devices. Yhey may have been born deaf, or lost their hearing gradually or suddenly. Yet virtually all enjoyed and appreciated better quality of life and being able to hear with a cochlear implant prior to their implant failures.
However This was cut short by a defective cochlear Implant
Potential symptoms of defective cochlear implants include:
- A sudden sensation of discomfort or pain
- A sudden loud noise or popping sound
- An intermittent functioning;
- A complete loss of sound;
· In infants or children, an unwillingness to wear the external headpiece, crying or fussiness when the sound processor is turned on, lack of expected progress or diminished progress in achieving speech/language milestones, or apparent loss of audiological benefit.
If you or your child has been implanted with a defective cochlear implant, or you have received notification that your Advanced Bionic’s cochlear implant may fail or have experienced any of the complications, injuries or side effects liste above contact The cochlear Implant helpline today 1 877 522 2123