NaturaLyte Class 1 Recall at Fresenius Medical - Analyst Blog

Dialysis company Fresenius Medical Care AG & Co. KGAA FMS classified the recent voluntary recall of 56 lots of its NaturaLyte Liquid Bicarbonate Concentrate as a Class 1 Recall.

Classified as the most serious type of recall, Class I recalls involve situations in which there is a reasonable probability that use of the affected product would have caused serious health consequences or even death.

The news, however, did not negatively impact the stock, which climbed approximately 3.1% to close at $33.08 till the last reported session following the announcement.

The contaminated lots were recalled because FMS suspected the presence of higher levels of bacteria development during their shelf life than is allowed by the company's internal specification.

Laboratory testing identified the bacteria as Halomonas (species 1, 2, 3), a Gram Negative bacteria, typically found in water with high salinity. Bacterial contamination of the dialysate (fluid used in dialysis) may possibly lead to bacteremia (presence of bacteria in the blood), systemic infection or death.

The U.S. Food and Drug Administration (FDA) has received one report of death and two reports of injury that may be related to the use of this product.

The adulterated products were manufactured at FMS's Montreal, Canada facility from Aug 2013 through Apr 2014 and were distributed from Aug 15, 2013 till Apr 7, 2014. Of the total 56 lots, 49 were recalled on Apr 10 and the remaining 7 were recalled on May 1.

FMS published customer notifications for the same, including a list of the product lot numbers which should be permanently removed from use and returned. As part of its voluntary recall, FMS informed the FDA and Health Canada, as well as its customers about these findings and took steps to remove all the affected lots from distribution, and discontinue their use.

NaturaLyte Liquid Bicarbonate Concentrate is used in the treatment of acute and chronic renal failure during hemodialysis. It removes waste products from the blood through a filtering system and returns the uncontaminated matter to the body.

Zacks Rank

Currently, FMS carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the medical instruments industry include Alphatec Holdings, Inc. ATEC, RTI Surgical Inc. RTIX and Edwards Lifesciences Corp. EW. While Alphatec Holdings and RTI Surgical sport a Zacks Rank #1 (Strong Buy), Edward Lifesciences retains a Zack Rank #2 (Buy).