Novartis shares fell 0.6 percent by 0832 GMT on Wednesday, although one analyst said the company’s swift reaction should help keep it out of the crosshairs of lawyers.
As part of its voluntary withdrawal of the CyPass Micro-Stent, Alcon advised surgeons treating glaucoma patients to stop implanting the stents immediately, the company said in a statement on Wednesday.
“We believe that withdrawing the CyPass Micro-Stent from the market is in patients’ best interest and is the right thing to do,” said Alcon’s chief medical officer, Stephen Lane.
“Although we are removing the product from the market now out of an abundance of caution, we intend to partner with the FDA and other regulators to explore labeling changes that would support the reintroduction of the CyPass Micro-Stent in the future.”
The stent was designed to reduce pressure in the eye.
Based on two years of clinical data, the U.S. Food and Drug Administration had approved the CyPass Micro-Stent in July 2016 for use in conjunction with cataract surgery in adult patients with mild-to-moderate primary open-angle glaucoma.
But five-year post-surgery data showed patients experienced statistically significant endothelial cell loss compared to the group who underwent cataract surgery alone. Endothelial cells are believed to help maintain visual function.
The Alcon eye care business has highlighted the stent’s contribution to a recovery in sales. In the second quarter, Novartis said double-digit percentage growth of implantables including the CyPass stent helped drive an 8 percent surge in revenue from its surgical devices to $1.03 billion.
But a company spokesman said that CyPass sales were “immaterial” to Alcon’s total sales of $3.6 billion in the first half, and there would be no change to its target of mid-single-digit percentage sales growth in constant currencies this year.
The spokesman said the withdrawal would not have an impact on Alcon’s plans for a spin-off in the first half of 2019.
Zuercher Kantonalbank analyst Michael Nawrath estimated revenue from the stent at around $90-100 million.
Novartis’s quick move to withdraw the device after five years of patient follow-up will give little leverage to any lawyers considering potential claims against Alcon, he said.
“A withdrawal is always negative, but if you react appropriately you can avoid becoming the potential target of litigation and legal costs,” Nawrath said.