Hospira Inc, a hospital products maker that has grappled with regulatory issues at manufacturing plants for the past 18 months, said it had received a notice over the quality of its medical devices from the U.S. Food and Drug Administration.
The company reported the notice during a conference call on Wednesday after announcing a profit for the fourth quarter vs a year-earlier loss as sales of generic injectable drugs, IV solutions, drug pumps and other products increased more than 8 percent.
Hospira said the FDA completed an inspection of its medical device quality systems at its headquarters in Lake Forest, Illinois, last month and issued a list of 10 objectionable conditions. The list is known in the industry as a Form 483.
Some of the quality systems assessed as part of the Lake Forest inspection included supplier quality systems and medical device reporting and complaint systems, a Hospira spokeswoman said.
The company also said it sent notices to customers about some of its infusion pumps that had to either be recalled, fixed or adjusted.
Hospira has sent out 11 device notifications so far in 2013, including recall and device corrections, the spokeswoman said.
"While there may still be additional device field notifications going forward, we do not believe they will continue at the rate we have seen recently," she said in an email.
Shares in Hospira fell $2.05 to $32.90 in afternoon trading on the New York Stock Exchange.
Chief Executive F. Michael Ball said that FDA inspectors acknowledged some progress since the last inspection.
"The observations re-enforced our own assessment there is still a lot of work to be done within our device operations," Ball said on the conference call.
He said management had been doing a complete review of all of its medical devices even before the FDA notice. He said the new strategy would be aimed at modernizing and streamlining platforms.
Ball said there has been progress at some of its other manufacturing facilities that have had problems, including its Rocky Mount facility in North Carolina. Ball said a reinspection by the FDA would be extensive and lengthy but he expects it increase production this year.
He said Hospira's other plants emerged from shut downs on schedule.
Hospira's Clayton, North Carolina facility has resumed manufacturing propofol, an anesthesia that is administered intravenously and has been in short supply, and is building inventory in the fourth quarter of 2012 for an early 2013 relaunch.
He said the drug was being priced at a premium.
Hospira said it expects sales to rise 1 percent to 3 percent for 2013, and adjusted earnings per diluted share to be between $2.05 and $2.20.
Management said the relatively wide range is based on the expected rate of supply recovery and share gains, as well as improvements in quality and manufacturing performance.
In the fourth quarter, its net income was $5.3 million, or 3 cents per share, in the latest quarter, compared with a net loss of $214.0 million, or $1.30 per share, in the year-earlier period.
Adjusted earnings were 55 cents per share. On that basis, analysts on average were expecting earnings per share of 54 cents.
Net sales rose to $1.1 billion in the quarter from $1.0 billion a year before.
(Reporting By Debra Sherman; Editing by Chizu Nomiyama, Grant McCool and Leslie Gevirtz)