Update: Johnson & Johnson Received FDA's Class I Label For Jaw-Stabilizing Device

Sep. 2.14 | About: Johnson & (JNJ)

Summary

The FDA has put its highest-risk Class I label on the recall of Johnson & Johnson's subsidiary DePuy Synthes' jaw stabilizing system.

In my original article I mentioned that the reputation of DePuy Synthes has been trashed.

The recent action by the FDA is expected to keep Johnson & Johnson's stock under pressure for some time.

Any weakness in the stock offers nice investing opportunity for the longer term, as I said earlier.

Johnson & Johnson's (NYSE:JNJ) orthopedics-focused subsidiary DePuy Synthes unit is facing the FDA's ire as the regulator slapped the company's recall of its jaw-stabilizing device with highest-risk Class I label, MassDevice reports. FDA issued the alert after the company reported 15 injuries associated with jaw implants using DePuy's Craniomaxillofacial Distraction System. The device lengthens and stabilizes bone in the lower jaw in patients with birth or post-traumatic defects. A potentially deadly design flaw has been detected in the device that could block airways in infants. According to the FDA notice, "This could lead to respiratory arrest, and result in death."

In April, DePuy issued an urgent recall notice asking medical device providers to remove the device from inventory. The company recalled all lots of the device manufactured from April 20, 2009, to April 15, 2011, which were distributed up until April 14, 2014. The FDA's Class I label has been reserved for "situations in which there is a reasonable probability that use of these products will cause serious adverse health consequences or death."

In my original article, I mentioned that the reputation of DePuy Synthes has been trashed due to alleged deceptive marketing claims over its recalled metal-on-metal hip implants. The recent FDA action comes on the heels of J&J's withdrawal of its controversial power morcellator devices from the global market, the implication of which I discussed in another article. Investors should utilize the ongoing weakness in JNJ to accumulate the stock.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.