Eli GreenblatSeptember 12, 2011 - 10:29AMShares in bionic ear implant company Cochlear fell 17 per cent in early trade after the global leader in hearing technology announced a voluntary recall of its unimplanted CI500 Cochlear range.
Shares were down as much as $19.41, or 27 per cent, to $52.77. They were recently 18 per cent lower at $60.00.The Sydney-based company said in an announcement to the Australian Stock Exchange that it had begun notifying healthcare professionals and regulatory authorities about the recall.Cochlear said the financial impact of the recall was difficult to forecast at this stage.Cochlear said in its announcement that all existing recipients with a Nucleus C1500 series implant can continue to use their system as normal.Cochlear said less than 1 per cent of CI512 implants had failed since its launch in 2009, but that it had identified a recent increase in the number of Nucleus CI512 implant failures.To be cautious the company had decided to recall the Nucleus CI500 range of implants while it investigates the cause of the problem.Cochlear has implanted its bionic ear device in more than 250,000 people over the past 30 years and the company has managed to dodge the types of problems that have led many of its competitors to recall their own devices due to health-related problems linked to the devices.Over the past 10 years its key rivals in the United States were forced onto the sidelines due to problems with their own devices, handing Cochlear a clear run to capture a bulk of the North American market. The last time a rival of Cochlear was forced out of the market the Australian company boosted its market share well above 75 per cent.The affected CI500 implant range includes the Nucleus CI512 implant plus the following implants which are only available in limited markets - Nucleus CI513, Nucleus CI551 double array implant and Nucleus ABI 541 Auditory Brainstem Implant.Its Nucleus 5 external device range and any other previous generation externals are not subject to this recall.
More than 10 years ago Cochlear was the target of a US Department of Justice investigation into payments made to physicians and providers. No charges were ever brought against Cochlear or any of its executives.The company recently unveiled a full-year profit of $180.11 million, up 16 per cent, as revenue increased 10 per cent to $809.6 million.Continued technological innovation has helped Cochlear maintain its dominant market share in the implant industry, with its Nucleus range of implants touted as the next generation series of devices that would help Cochlear stay ahead of its competitors as well as encouraging greater take-up rates among doctors and email@example.com