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BARRY MEIER July 24, 2008
Zimmer Holdings, the nation’s biggest producer of
orthopedic devices, says it will suspend sales of an
artificial hip component that some doctors have
complained was failing at a high rate.
The company also lowered its earnings outlook as a
result of the suspension, and its shares fell sharply
In recent months, some doctors have complained that
the device, a hip socket known as the Durom cup, was
failing in their patients, who then had to undergo
Zimmer said its investigation had determined that the
product was not defective. But it stated that even some
experienced surgeons had found it difficult to implant.
The company said it expected to resume sales once
specialized training for doctors had begun.
Since it was first sold in the United States in 2006,
the Durom cup has been implanted in more than 12,000
patients. Zimmer said it expected the overall need for
early replacement in patients would be low. But Zimmer
data and interviews with doctors suggest that hundreds
of patients might need such procedures in coming years.
Some doctors said their patients had not had problems
with the cup.
The company also said the sales halt would cut $20
million to $30 million from its sales estimates. Zimmer
said it expected that earnings for the year would be
$4.05 to $4.10 a share, down from its earlier forecast
of $4.20 to $4.25 a share.
In composite trading on the New York Stock Exchange,
shares of Zimmer, which is based in Warsaw, Ind., fell
$4.87 a share to close at $66.01 a share. Bruce Nudell,
an analyst at UBS who covers medical devices, said that
the company had not issued any warnings that sales would
“They had given hints that there would not be a
recall but this came as a surprise,” Mr. Nudell said.
The issue with the device surfaced in April when a
surgeon in Los Angeles, Dr. Lawrence Dorr, publicly
warned other orthopedists about cup failures his
patients were experiencing. In response, Zimmer said it
would start an investigation but said it saw no reason
to take added action like halting sales.
At the time, Zimmer also cited European data showing
that the device was doing well there. But the version of
the device used outside the United States is slightly
different from the one used here. Also, while doctors
here use it in traditional hip replacement, surgeons in
other countries used it in a relatively new kind of hip
surgery known as resurfacing, which involves somewhat
different surgical techniques.
Zimmer, which announced the sales suspension late
Tuesday, said that its investigation found that using
the cup required a higher degree of precision.
Dr. Dorr, who said he had stopped using the device
last year, said he did not plan to start reusing it.
“It is a bad design,” he said.
Mr. Nudell, the analyst, said that other doctors were
happy with the cup, but he expected that Zimmer might
see a 50 percent drop in the product’s use when sales
As a result of halting sales, Zimmer said that it was
also suspending United States premarketing trials of its
system for resurfacing, the process that is used in
Europe. That decision will put it further behind
competitors that already have such products on the