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Natus Medical Incorporated
today released a statement regarding
the issuance by the Food & Drug Administration (the “FDA”) of a recall notice
for the Company's Olympic Cool-Cap.
The recall addresses a situation where the Cool-Cap screen freezes and
interrupts patient cooling. Natus had previously communicated the problem to
customers in May 2012 by issuing a Class II Recall notice, which is the FDA's
mid-level health hazard classification. Customers are able to recover from the
screen freeze failure by simply rebooting the Cool-Cap system. Cooling
treatment can continue in a safe manner with the Cool-Cap system as originally
intended.
The Company has provided recall information to the FDA as required in a timely
manner since this problem originated. Today's announcement indicates that the
FDA has re-classified this action as a Class I Recall which is the highest
relative degree of health hazard classification for a product recall. As a
result of this reclassification, Natus will be sending follow up Safety Notice
letters to all customers reminding them how to recognize this screen freeze
condition and how to recover from it. Separately, an unreliable power supply
module is being replaced on an ongoing basis in effected units.
The costs of the measures described above are not expected to be material,
including costs yet to be incurred, and were previously accrued as an expense
in the Company's financial results for the nine months ended September 30,
2012.
The recall does not prevent the Company from continuing to market and sell the
Cool-Cap, nor does it prevent clinicians from using the device. Revenue from
the Cool-Cap represents less than one percent of the Company's consolidated
revenue.
The Company received premarket approval (“PMA”) from the FDA to market the
Olympic Cool-Cap in December 2006. The Cool-Cap system, which is the only
FDA-approved device for the treatment of hypoxic ischemic encephalopathy
(“HIE”) in term newborns, provides selective head cooling to prevent or reduce
the severity of neurologic injury associated with HIE.
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