Sientra plummets on U.K. breast implant halt

Shares of breast implant maker Sientra (NSDQ:SIEN) plummeted some 53% yesterday after British medical regulators suspended sales of implants made by Sientra’s Brazilian supplier Silimed.

The U.K.’s Medicines & Healthcare Products Regulatory Agency yesterday said it and other European regulators are testing Silimed’s products – which include breast, penile and testicular implants – after contamination was detected during an audit of the company’s manufacturing practices.

Investors reacted by sending SIEN shares down -52.9% to a $9.70 close yesterday. The stock rebounded 14.8% in pre-market activity this morning, to $11.13 per share.

Leerink Partners analyst Richard Newitter said the reaction by Sientra stockowners is overdone, citing differences in the way Silimed makes the Sientra implants.

“While SIEN’s products are manufactured at the same facility where Silimed manufactures the products in question, they follow separate protocols and thus we think it’s premature to extrapolate that the FDA will necessarily take similar action,” Newitter wrote yesterday in a note to investors. “Versus the products Silimed makes for the European market, the products Silimed manufactures for SIEN are manufactured in separate runs using different processes (guided by FDA compliance protocols). Therefore it may not be correct to make comparisons between MHRA’s observations and speculated FDA observations.

“Ultimately we’re inclined to think this could be more of a ‘bark vs. bite’ situation,” he wrote. “At this point, we’re not inclined to think that Silimed’s CE Mark suspension is a sign that SIEN’s sales are at risk. However, we can’t rule out the possibility that the MHRA announcement will result in an FDA audit. We’d note that Silimed’s last inspection from the FDA — which looked at processes associated with SIEN products and compliance with good manufacturing practices — was in mid-2013. Additionally, the facility has undergone multiple FDA inspections over the last 10 years, and these inspections have never resulted in a Form-483 observation.”

Particles found by German inspectors

A German authority appointed to monitor Silimed “has recently carried out an inspection of the manufacturing plant in Brazil and established that the surfaces of some devices were contaminated with particles,” it said in a statement.

The Silimed suspension covers devices used in plastic surgery such as breast and pectoral implants, urological devices including testicular and penile implants and vaginal stents, as well as other surgical devices, the MHRA said.

Eurosurgical, a company which distributes Silimed’s products in Britain, said it had supplied around 13,000 implants in the U.K. over the past 5 years.

“The vast majority would have been breast implants, and around 60% of those would have been for use in cosmetic breast enlargement,” managing director Peter Cranston told Reuters.

A spokesman for the MHRA said the agency didn’t yet know whether any potentially contaminated products would have reached patients, and did not know how many Silimed products might be affected. “All those questions are part of our current investigations,” he said.

The MHRA statement said, however, that “for the moment there has been no indication that these issues would pose a threat to the implanted person’s safety.”

“EU health regulators have initiated testing of samples of products to establish if there are any health risks,” it said.

Silimed, which claims to be the 3rd-largest implant maker in the world, said in an email to Reuters that it’s preparing a technical note to show its products comply with national and international standards, and will send it to European health authorities.

The Silimed product suspension comes after medical authorities found in 2010 that one of the world’s leading breast implant makers, France’s Poly Implant Prothèse, was not using medical-grade silicone in its devices, leading them to have double the rupture rate of other implants.

Hundreds of thousands of patients across Europe and South America were affected, and PIP’s president, Jean-Claude Mas, was given a 4-year jail sentence in December 2013.

The British Assn. of Plastic, Reconstructive and Aesthetic Surgeons (BAPRAS) said it was aware of the Silimed issue and was working closely with British regulators.

“There has been no indication … that these issues pose a threat to patient safety, however we are advising our members to contact any patients who may be affected,” BAPRAS president Nigel Mercer said in a statement.

He said any patients with concerns about implants should seek advice from their surgeon or clinic.

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