FDA: Cardiac Science's corrective actions lacking

Cardiac Science of Bothell said a Food and Drug Administration (FDA) inspection found the company wasn't meeting agency requirements on correcting and preventing problems with its automated external defibrillators (AEDs).

Its shares fell as much as 29 percent in extended trading after the disclosure Wednesday in a regulatory filing after the markets closed.

The company also cautioned that its voluntary product recall of AEDs earlier this month will reduce first-quarter revenue by as much as 20 percent.

Cardiac Science announced several quality-control problems in the past year, including a suspension of sales this summer, a "voluntary corrective action" it proposed in November and a recall of 12,000 defibrillators in February.

The devices, often found in office buildings, hotels and other public places, are used to treat sudden cardiac arrest.

The company will respond to the FDA's warning letter promptly and "takes these matters seriously," Cardiac Sciences' filing said. If it can't satisfy the agency, "we may be subject to regulatory action by the FDA, including seizure, injunction and/or civil monetary penalties."

The recent warning letter was based on an inspection that took place during the third quarter of 2009, Cardiac Science said.

The letter deemed "inadequate" the company's November move to issue a software fix to detect a potential component problem in about 300,000 of its Powerheart and CardioVive AEDs. The agency said the fix wouldn't prevent failure, merely detect it.

"The letter also asserts other inadequacies, including the company's procedures relating to the evaluation, investigation and follow up of complaints, procedures to verify the effectiveness of corrective and preventative actions and procedures relating to certain design requirements," the company said.

Since the voluntary recall Cardiac Science announced Feb. 3 for about 12,000 defibrillators, shipments of the affected AEDs have resumed.

But the company said "the interruption in shipments, combined with the related distraction among our sales force and in the market, has resulted in a reduction of new product orders during the first quarter of 2010 that will likely result in a reduction in revenue of approximately 10%-20% compared to what we expected for this period."