Home health products supplier Invacare (NYSE:IVC) is still enmeshed in negotiations with the U.S. Food and Drug Administration over a possible shutdown of some wheelchair production at an Elyria, Ohio plant.
In December, Invacare announced that the FDA had asked it to enter into a legal agreement that would require the company to suspend “certain” wheelchair manufacturing operations at the Elyria plant. Negotiations over final details of the agreement have now stretched on for about two months, and potentially longer, depending on when the negotiations began.
CEO Gerry Blouch said Thursday, in announcing Invacare’s fourth-quarter earnings, that the company is unable to provide investors with any financial guidance for 2012 due to the ongoing negotiations.
“The company is working expeditiously to resolve its negotiations with the FDA and in the meantime continues to add resources in order to make systemic improvements to ensure full compliance with the FDA’s [Quality System Regulation],” Blouch said.
At the time of the December announcement, Blouch wouldn’t go into detail about any of the issues the FDA cited at the Elyria factory, and said only that the alleged violations “relate generally to processes” involved in the manufacture of wheelchairs.
Last week, Invacare announced plans to move production of a line of manual wheelchairs to Mexico from Elyria. The company didn’t say whether the move was made in part to appease the FDA, but it certainly appears likely. Whether that move was enough to satisfy the FDA’s proposal to suspend “certain” wheelchair manufacturing at the plant remains to be seen.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
For the fourth quarter, Invacare reported a loss of $35 million, or $1.10 per share. The loss reflected asset write-downs that totaled $49.5 million related to goodwill and intangibles, and a charge of $8.9 million connected with restructuring activities.
Revenue was essentially flat at $450 million for the quarter.
