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CNN WORLD REPORT
Shares of Swiss Medical Equipment Company Drop Because of Legal Troubles
Aired September 2, 2001 - 14:31 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ASIEH NAMDAR, CNN ANCHOR: Shares for Switzerland's leading medical technology company fell sharply this week because of legal troubles. Sulzer Medica is on trial in the U.S. for allegedly using a tainted lube to make hip and knee implants. As a result, thousands of the devices must be replaced. Swiss TV-SRI's Mike McMahon has more.
(BEGIN VIDEOTAPE)
MIKE MCMAHON, SWISS TV-SRI CORRESPONDENT (voice-over): Sulzer Medica's orthopedic implants and surgical products have helped people worldwide maintain and improve their quality of life, but the company is in trouble. Sulzer Medica has to make massive payments to patients, mostly American, whose implants are faulty.
The new boss is Stephan Reitiker.
STEPHAN REITIKER, CEO, SULZER MEDICA (through translator): We at Sulzer Medica and I myself as company chief executive, have a clear moral responsibility for what happened to the patients in the United States.
MCMAHON: What happened to the patients was this, at the Sulzer Medica subsidiary in Texas, some hip and a few knee replacements were made defective by lubricant residue left on the socket of the implants. That meant natural bone growth into the socket could be impeded, causing the artificial hip to loosen. So far, some 2,500 revision surgeries have been performed.
Sulzer says the cost could be $700 million. They have offered 780 million. That financial burden would push the company almost to its limit, say financial analyst Patrick Laager.
PATRICK LAAGER, FINANCIAL ANALYST (through translator): If the compensation offer is accepted above all by the court, where we expect a decision later this year, the company has a good chance of survival.
MCMAHON: But the wolves have already been circling, and that makes an independent future for Sulzer Medica uncertain, according to another analyst, Martin Schmidt.
MARTIN SCHMIDT, FINANCIAL ANALYST (through translator): Now that we can see what the costs will be, and in view of the fact that the company is undervalued, Sulzer Medica could be taken over. MCMAHON: A corporate crisis in Switzerland because of lubricant residues on titanium sockets in Texas. Neither of much importance for implant patients like Joel Green. For him, the consequences are up close and personal.
JOEL GREEN, IMPLANT PATIENT: The whole idea of having my surgery was that perhaps I could go back to work. That's gone.
MCMAHON: Disappointment. But it's hoped improvement, as Sulzer Medica works to reestablish its credibility and make its product better.
This is Mike McMahon of Swiss Television and Swiss Radio International for CNN WORLD REPORT.
(END VIDEOTAPE)
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