World important news by Karren

UPDATE 2-Australia’s Cochlear falls on uncertainty over recalled implant

* Nucleus 5 implant likely to be off the market for months - analysts* CEO says impact on market share has been minimal* Shares fall as much as 5.5 pctBy Victoria ThiebergerMELBOURNE, Oct 18 (Reuters) - Shares in Australia’s Cochlear Ltd fell more than 5 percent on Tuesday after the world’s biggest maker of hearing implants failed to give an indication on how long its top-selling implant will be off the market after a recall.The recall of the Nucleus 5 implant will cost up to A$150 million ($153 million), more than 18 percent of the company’s last fiscal year sales, executives said at an annual shareholders’ meeting.”It is still the fact they haven’t given guidance on when the product will be back in the market,” said Karara Capital portfolio manager Akshay Chopra.”The longer the issue drags on then the risk of market share loss becomes higher,” said Chopra.The shares have lost over a quarter of their value since Cochlear voluntarily recalled the entire range of unimplanted Nucleus 5 implants last month, after an increase in the failure rate.They fell to a low of A$51.52 on Tuesday, before recovering to close down 1.8 percent at A$53.54. The shares were above $72 before the recall.The Nucleus CI 500 line accounted for about 70 percent of sales in fiscal 2011, and Cochlear dominates the global market for hearing implants with a 65 percent share.Analysts say the implant is likely to be off the market for at least six months.Even after the cause for the failure is determined, Cochlear will need to run clinical tests and win regulatory approval to return to market.The U.S. Food and Drug Administration can take up to 180 days to review data.Chief Executive Chris Roberts told Reuters the recall has had little impact on Cochlear’s market share, because the company was able to substitute the recalled Nucleus 5 with the implant component from the previous Freedom range.Roberts said the company was in no rush to conclude an investigation into the cause of the failures, which relates to moisture in the devices that can cause a malfunction in one or more diodes.”Because of the architecture of the system where we can mix and match the components, we have got the luxury that we can do all the investigations we like,” Roberts said in a telephone interview.There are 28,000 users of the Nucleus CI 500 range, and Cochlear is not recalling units that have been implanted. If failure occurs, the unit shuts down without injury.The implant helps correct hearing loss by converting sounds to electrical energy, which is transmitted to hearing nerves.TRIPLING PRODUCTIONCochlear was formed in the early 1980s to partner with the Australian government to develop and market a bionic ear implant invented by a professor at Melbourne University.The company had revenues of A$809 million last fiscal year, with the Americas accounting for 43 percent of the sales, Europe 40 percent and Asia 17 percent.Roberts said Cochlear had more than tripled production of the older Freedom implant, which still works with the newer Nucleus 5 external component, and had not run into any supply problems with it.Freedom accounted for only 30 percent of production in fiscal 2011.”That was a major change for the manufacturing. It was more than trebling production, but we have that flexibility and agility in manufacturing which really helped,” he said.Executives earlier told shareholders the recall will cost between A$130 million and A$150 million, including stock write-offs and other charges.The after-tax impact is expected to be A$20-A$30 million.The company said it planned to preserve its current dividend pattern and pay a first-half dividend of A$1.20 a share.