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Medica posts healthy profits

Profits at Sulzer Medica rose by 52 per cent in the first quarter to SFr 44 million ($27.2 million), compared with the same period last year.

Medica is hoping for more good news from the United States, where it is on the verge of resolving a class-action lawsuit over faulty hip and knee implants.

The company will learn on Wednesday whether 2,000 plaintiffs who were given the faulty implants have accepted its SFr1.6 billion ($1 billion) settlement. They have until Wednesday to opt out of the settlement.

If they choose to accept it, they will not be able to pursue further claims against Medica. So far, 90 plaintiffs have opted out of the settlement according to the company.

The company also announced sales growth of seven per cent to SFr386 million ($239 million), which it said was driven by increased sales in the key divisions of joint and fracture care and spine care.

"These results we have generated are proof that our operating business has a solid basis, in spite of the hip and knee litigation," said Sulzer Medica CEO, Stephan Rietiker.

Net profits were at the top end of analysts' expectations, and were boosted by tax rebates. "The net profit figure rose so sharply... because it includes tax benefits, which were due to losses last year in connection with the US litigation," said company spokesman, Andy Bantel.

Chapter 11

The litigation may force the company to file for Chapter 11 (protection from creditors) in the US if the number of patients opting out of the settlement is too high.

Sulzer Medica said it will probably reveal the number of patients opting out of the settlement on Thursday, ahead of its annual meeting the following day. Analysts say that about 50 patients still want to opt out.

Sulzer Medica recalled thousands of implants in December 2000 after a manufacturing problem contaminated them with an oily residue, preventing them from bonding with patient's bones.

Shareholders are due to find out Sulzer Medica's new corporate name on Friday, reflecting its spin off last year from Sulzer.

Earlier this month, Sulzer Medica was also forced to replace faulty heart valve testers in 50 countries after a patient died in Britain.

swissinfo with agencies


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