Sientra hits 52-week low on Brazil’s Silimed implant ban

Shares of Sientra (NSDQ:SIEN) plunged a further 20% today to a 52-week low after Brazilian regulator Anvisa last week suspended the production, sale and use of products made by Brazil’s Silimed, Sientra’s sole supplier of breast implants.

The news follows a decision last month by the U.K.’s Medicines & Healthcare Products Regulatory Agency to suspend sales of Silimed implants, including breast, penile and testicular implants, after contamination was detected during an audit of the company’s manufacturing practices.

SIEN shares plummeted some -53% Sept. 24 in reaction to the British regulator’s move. In Brazil, Anvisa described the ban as “a precautionary measure” after a recent inspection confirmed the German authority’s findings. The regulator said it was carrying out tests on these products to assess any risks.

That pushed SIEN shares down another -20.1% today to $8.29 per share in mid-afternoon trading, after they logged a 52-week low of $8.01.

In a statement Silimed said that it has always maintained the highest quality standards and that the existence of sterile particles do not represent a health risk. It is working with European and Brazilian regulators to reverse the decision, it said. Silimed claims to be the largest manufacturer of silicone implants in South America. It is 1st in sales in Brazil, 3rd in the world and exports devices to more than 75 countries worldwide.

Leerink Partners analyst Richard Newitter, writing this morning in a note to investors, said that interviews with plastic surgeons revealed their concerns about the problem.

“Docs are very aware of the issue and noted that SIEN has been available to address their questions. It appears to us that physicians are more concerned about the publicity impact rather than about implant quality, suggesting that any potential disruptions around this issue be limited once Silimed is able to demonstrate coherence to good manufacturing processes. Some have indicated they are continuing to implant SIEN even during this uncertain period, and others saying they are nervous and pulling back usage (fearful of a potential negative PR fallout),” Newitter wrote.

Material from Reuters was used in this report.

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