Cochlear Stock Drops After Study Links Implants to Meningitis

From: Bloomberg - Jul 31, 2003

July 31 (Bloomberg) -- Shares of Cochlear Ltd., the world's largest maker of inner-ear hearing devices, dropped as much as 8.9 percent after a study said implants to help deaf children increase the risk for bacterial meningitis.

Cochlear's stock fell A$1.80 to A$32 as at 10:04 a.m. in Sydney and earlier fell as low as A$30.80. Implants may put children at a 30-fold higher risk for bacterial meningitis, a deadly infection of the brain and spinal cord, according to a study in the New England Journal of Medicine.

Australia's Cochlear Ltd., and closely held Med-El Corp. of Austria and Advanced Bionics Corp. of Sylmar, California, make the devices that have revolutionized treatment for severe hearing loss in the past two decades. The implants, which cost as much as $60,000, translate sound into electronic signals that allow deaf children to hear and learn to speak.

''We saw an increased risk in children with any type of cochlear implant,'' lead researcher Jennita Reefhuis said in an interview. Parents ''should watch carefully for any signs of bacterial meningitis'' and seek immediate treatment, she said.

Cochlear said its Nucleus implant system doesn't include an extra piece known as a positioner which may be linked to increased risk of the disease, according to a statement from the company e-mailed to Bloomberg. ''The system retains full commercial approval for implantation in children as young as 12 months in the U.S., Europe and Asia,'' is said.

Advanced Bionics recalled one implant with a positioner in July 2002 after reports of meningitis. The new study found potential risks for all the devices, especially for patients with positioners or malformed inner ears.

Last year, Cochlear managed to boost sales of its products when Advanced Bionics stopped selling its product for six weeks.

Twenty-six of 4,264 children who got the implants from 1997 through August 2002 while under age six subsequently developed meningitis, according to the research by the U.S. Centers for Disease Control and Prevention. Six additional children have since developed the condition. Less than one case would normally be expected among children under six, the CDC researchers said.

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