Categories Markets, Retail

Allergan stock plunges to 5-year low after product recall in Europe

Allergan (AGN) suffered a major setback Wednesday after European regulators asked the company to stop the sale of its textured breast implants in the region. Shares of the Irish-pharmaceutical firm fell to a five-year low in the early trading hours after it launched a recall of the products.

In addition to breast implants, Allergan is also recalling its tissue expanders which have already been shipped, after being notified by the French regulators citing expiration of the mandatory CE mark certification. The action comes in the wake of reports that the products might cause cancer in the users.

Allergan’s shares, which lost about 19% since January this year, have been on a losing streak for the past few months. The stock dropped about 7% early Wednesday and continued the downtrend as the session progressed.

The action by the European regulators comes in the wake of reports that the products might cause cancer in the users

Earlier, the French agency had urged the public to prefer smooth-shell breast implants to the textured-shell variants after an extensive investigation revealed that those who use the latter might get a rare form of leukemia. Meanwhile, there is no restriction on the sale of smooth-surface implants.

“Allergan takes this situation very seriously and is committed to engaging with all stakeholders to ensure they have the most up to date information. We are committed to strict adherence to all regulatory requirements, to the most rigorous scientific evidence and to the highest industry standards for our products,” said chief medical officer Charles Hugh-Jones.

Experts believe there is more trouble in store for Allergan, which is a leading manufacturer of breast implants, considering the fact that the FDA is also reviewing the safety aspects of textured breast implants. If the outcome of the probe is negative, the company could face similar action in the US.

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The latest developments could have a negative impact on other companies that produce breast implants. In a sign that the campaign might spread to other markets, regulators in Europe and the US are gearing up for evidence collection and review meetings involving all the stakeholders. One of the recommendations is that patients should be informed in advance about the potential health risks associated with such implants.

Meanwhile, Allergan is all set to approach the authorities in Europe to have the certification renewed, and also to take the legal route if the same is denied. Downplaying the regulation, Allergan’s management claimed the action was not based on any scientific evidence.

 

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