STOCKHOLM (Reuters) - Sweden’s Getinge (GETIb.ST) said on Thursday it had agreed to sell its troubled surgical mesh business that saw the medical equipment maker swing to a loss in the third quarter due to provisions for lawsuits in the United States and Canada.
Getinge, which makes products for surgery, intensive care and infection control, said it made an operating loss of 1.7 billion crowns ($194 million), against a year-ago 304 million profit, roughly matching analysts’ expectations.
Getinge said it had agreed to sell the surgical mesh unit with no material impact on its financials. The divestment excludes the mesh product liability claims.
On Monday, its shares fell 18 percent on news of the larger-than-expected 1.8 billion crown provision and a 90 million writedown, erasing recent gains that had come on the back of investor hopes Getinge was turning its back on years of setbacks.
On Wednesday, shares were up 1 percent at 1142 GMT, taking a year-to-date fall to 32 percent.
The damage claims relate to patients’ alleged complications after receiving Getinge’s mesh implants, which are used for hernia repair. Getinge expects the first trials in late 2019.
Getinge has experienced several turbulent years with repeated forecast cuts, earnings misses and management changes, as well as quality control problems necessitating costly improvements ordered by the U.S. Food and Drug Administration.
The company is also being investigated in Brazil for alleged fraud in bidding proceedings - a probe related to which Getinge has set aside 419 million crowns this year and last.
Getinge’s order intake was up 1 percent organically in the quarter. The company stood by guidance given in July for organic sales growth this year of 2-4 percent.
($1 = 8.9652 Swedish crowns)
Reporting by Anna Ringstrom; editing by Niklas Pollard