Abbott Stock Down on Urgent Field Safety Notice for TactiCath

Recently, Abbott ABT issued an urgent field safety notice in Germany related to its TactiCath Quartz Contact Force Ablation Catheter. Since the announcement was made, shares of the company declined more than 4% to reach $88.25 at yesterday’s close.

What's in the Urgent Field Safety Notice?

Through the notice, the company warned its customers about a high rate of reported complaints for loss of contact force information while using the TactiCath catheter. The company noted that over a 26-month period, out of 84,104 catheters that were distributed, 4.3% were reported with loss of contact force information.

More specifically, there were 2985 cases where a single catheter was exchanged due to contact force failure. In 381 cases, three, four or five catheters were needed. In two cases, the procedure could not be completed. In three cases of cardiac perforation or tamponade, contact force failure could not be ruled out as a potential cause.

Around 33% of the reported complaints occurred prior to catheter insertion and the rest took place during the procedure.

Potential Risks

According to Abbott, potential risks that a patient may face include ineffective ablation, potentially resulting in an increased risk of AF recurrence or need for repeat procedure. The insertion of a replacement catheter or catheter exchanges may result in air embolism, extended exposure to anesthesia and fluoroscopy, infection, and bleeding. The potential for cardiac perforation and associated harms (like tamponade) and clinically significant or minor delays in the procedure are the other associated risks.

The company’s stated recommendations include covering of unused optical cable ports on the TactiSys Equipment with the protection cap when not in use and careful disengagement of the catheter from the packaging tray to avoid damage to the contact force mechanism.

The company has also mentioned certain guidelines related to product return, reporting, and customer assistance.

We note that the TactiCathContact Force Ablation Catheter received FDA approval last year and CE Mark back in 2017.

Difficult Time Prevails for Abbott

This news came as a setback for Abbott, which is already entangled in issues like procedural delays for its non-coronavirus products. We note that from March, when the heath industry across the globe started to postpone non-emergency healthcare activities to focus on COVID-19 treatments, Abbott’s hospital-based elective cardiovascular EP ablation and neuromodulation procedures witnessed a sharp decline in demand.

Per The Street report's Jun 1 version, Goldman Sachs downgraded Abbott to Sell. According to the report “Goldman said that despite taking an early lead with multiple emergency use authorizations (EUAs) in the U.S. and a sizable test production outlook, "competitors have steadily diminished ABT’s early advantage with their own approvals on high throughput systems."

We note that, in March, Abbott launched two COVID-19 tests — the ID NOW COVID-19 molecular test (the fastest available molecular point-of-care test delivering results within 13 minutes and positive results in five minutes) and the RealTime SARS-CoV-2 molecular test (which runs on Abbott's m2000 RealTime System located in hospitals and reference laboratories).

In April, the company rolled out its third COVID-19 test, which is a serology blood test for the detection of the antibody, IgG, on its lab-based immunoassay testing platforms. The company also noted earlier about its efforts to develop another lab-based serology test to detect one more important antibody, IgM. However, it has not yet come out with this.

Meanwhile, Becton, Dickinson and Company’s BioMedomics and Ortho Clinical Diagnostics have come up with similar tests, which detect all COVID-19 related antibodies, including IgM.

Share Price Performance

Over the past three months, shares of Abbott have outperformed its industry. The stock has gained 7.9% compared to 2.6% rise of the industry.

Zacks Rank & Key Picks

Abbott currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the broader medical space are Aphria Inc. APHA, Illumina, Inc. ILMN and QIAGEN N.V. QGEN.

Aphria’s long-term earnings growth rate is projected at 24.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Illumina’s long-term earnings growth rate is estimated at 11%. The company presently has a Zacks Rank #2.

QIAGEN’s long-term earnings growth rate is estimated at 12.2%. It currently sports a Zacks Rank #1.

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