Shares of Boston Scientific (BSX) - Get Report fell Tuesday after the medical-device maker said it initiated a global recall of all unused inventory of the Lotus Edge Aortic Valve System due to complications related to its product delivery system.
Shares of the Marlborough, Mass., company at last check dropped 10% to $34.05.
"The voluntary recall is related solely to the delivery system, as the valve continues to achieve positive and clinically effective performance post-implant," the company said.
This device is used to repair diseased aortic valves.
Boston Scientific will incur estimated total pretax GAAP charges of $225 million to $300 million due to inventory, fixed asset, intangible asset and other exit charges since it has decided to remove the entire product platform.
Of the total charges, $100 million to $150 million will apply to BSX's adjusted fourth-quarter results.
The move will add 1 to 2 cents to earnings per share in 2021 and will be neutral thereafter, Boston Scientific estimated.
"While we have been pleased with the benefits, the Lotus Edge valve has provided to patients, we have been increasingly challenged by the intricacies of the delivery system required to allow physicians to fully reposition and recapture the valve," Chairman and Chief Executive Mike Mahoney said in a statement.
"The complexity of the delivery system, manufacturing challenges, the continued need for further technical enhancements, and current market adoption rates led us to the difficult decision to stop investing in the Lotus Edge platform."
Boston Scientific said it would instead focus resources on its Acurate neo2 Aortic Valve System, Sentinel Cerebral Embolic Protection System, and other technology in its portfolio.