The Houston trial law firm Arnold & Itkin LLP has filed five lawsuits against the makers of pain pumps and related medications based on claims that many of the companies' defective devices are causing irreversible shoulder damage among patients. Currently, the attorneys at Arnold & Itkin are representing 28 people who received pain pumps to manage pain following shoulder surgery. The pumps utilize a catheter to deliver continuous doses of medication directly into the shoulder. Pain pump manufacturers were denied approval by the U.S. Food and Drug Administration to use the pumps to mitigate pain in shoulder joints, but the companies continued to promote their use in that way. Many former pain pump users say the companies were negligent in designing, researching and selling pain pumps that they should have known were dangerous. The legal filings include claims of fraud, breach of warranty and products liability against the defendant manufacturers. Plaintiffs allege that the pain pumps cause postarthroscopic glenohumeral chondrolysis (PAGCL), the progressive destruction of cartilage in the glenohumeral joint connecting the arm to the shoulder. Without the cartilage, bones grind together causing excruciating pain. PAGCL was first widely identified in 2004, with subsequent studies establishing a link between pain pumps and PAGCL. Named as defendants are several pain pump manufacturers, including I-Flow Corp., Orthofix International NV, Stryker Corp., Moog Inc., Sgarlato R.P. Inc., Breg Inc., Linvatec Corporation, and DJO Incorporated. The lawsuits also name several pharmaceutical companies, including AstraZeneca plc, Abbott Laboratories, Fresenius Kabi Pharmaceuticals Holding Inc., and Hospira Inc.

Orthofix International NV reported unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2009. For the third quarter, the company reported the net sales of $135.10 million as compared to the net sales of $129.30 million for the same period a year ago. Operating income of 17.75 million as compared to the operating loss of $289.52 million for the same period a year ago. Income before income taxes of $10.40 million as compared to the loss before income taxes of $303.32 million for the same period a year ago. Diluted net income per common share of $0.36 as compared to the diluted net loss per common share of $13.87 for the same period a year ago. Consolidated EBITDA of $26.12 million. Net income of $6.19 million as compared to the net loss of $237.25 million for the same period a year ago. Adjusted net income of $7.65 million as compared to the adjusted net income of $7.65 million or earnings per share of $0.44 as compared to the adjusted net income of $7.30 million compared to the adjusted net income of $0.43 for the same period a year ago. Adjusted operating income of $19.13 million as compare to the adjusted operating income of $14.41 million for the same period a year ago. Cash flow from operations in the third quarter of 2009 was approximately $11.2 million, which was greater than cash flow of approximately $167 000 in the prior year. For the nine months, the company reported the net sales of $401.62 million as compared to the net sales of $387.37 million for the same period a year ago. Operating income of $41.90 million as compared to the operating loss of $266.39 million for the same period a year ago. Income before income taxes of $23.91 million as compared to the loss before income taxes of $288.57 million for the same period a year ago. Net cash provided by operating activities of $28.22 million as compared to the net cash provided by operating activities of $2.42 million for the same period a year ago. Consolidated EBITDA of $94.02 million. Diluted net income per common share of $0.87 as compared to the diluted net loss per common share of $13.33 for the same period a year ago. Capital expenditures of $16.07 million as compared to the capital expenditures of $15.83 million for the same period a year ago. The company reiterated earnings guidance for the full year of 2009. The company reiterated its full-year revenue guidance of $535-$545 million, and its EBITDA guidance of $93-98 million. Additionally, the company reiterated its expectations for 8%-12% full-year revenue growth and fourth quarter operating profitability in its spinal implants division.

Orthofix International NV, Q3 2009 Earnings Call, Oct 29 2009