NEW YORK (AP) – Shares of Baxter International Inc. fell after the medical device maker said the Food and Drug Administration wants it to recall and destroy its Colleague infusion pumps.
Baxter said it will propose alternatives to the FDA’s instructions, but the company expects to take a charge of $400 million to $600 million in the first quarter.
The FDA said Baxter had failed to fix problems that dated to mid-2006. If the pumps are recalled, Baxter will offer refunds or replace them free of charge. The FDA said as many as 200,000 pumps may be in use.
In a note to clients, Credit Suisse analyst Kristen Stewart said the recall would help competitors CareFusion and Hospira, and while Baxter maintained its annual guidance, Stewart cut her estimates over the next three years.
She said the full effects will be determined by how quickly the FDA requires Baxter to carry out the recall, and how quickly it can increase production of other products to replace the recalled Colleague pumps.
Stewart kept a “Neutral” rating on shares of the Deerfield, Ill., company.
Date: May 4, 2010
Source: Associated Press
