Stryker Settles Hip Implant Lawsuits; To Take $1.425 Bln Charge

(RTTNews) - Orthopedics devices maker Stryker Corp. (SYK) announced settlement agreement to compensate eligible U.S. patients who had surgery to replace their rejuvenate modular-neck and/or ABG II modular-neck hip stems.

The company noted that it has recorded charges to earnings totaling $1.425 billion representing the actuarially determined low end of the range of probable loss to resolve these matters and no additional charge to earnings is being recorded in connection with entering into the Settlement Agreement.

It is expected that a majority of the payments under the Settlement Agreement will be made by the end of 2015.

The Settlement Program is available to eligible United States patients who had revision surgery for reasons related to the voluntary recall of the modular-neck hip stems prior to November 3, 2014.

Separately, Wendy Fleishman of the national plaintiffs' law firm Lieff Cabraser Heimann & Bernstein, LLP, and member of the Lead Counsel Committee, commented on the settlement announced today in the litigation against Stryker Corporation for the recall of its Rejuvenate and ABG II artificial hip implants: "Plaintiffs have a very strong case against Stryker for defective hip implants. We applaud all the parties and the Courts for encouraging an early resolution of the claims for revision surgeries."

Under the settlement, Stryker will provide a base payment of $300,000 to patients that received the Rejuvenate or ABG II hip systems and underwent revision surgery by November 3, 2014, to remove and replace the devices.

The base award may be adjusted upward depending on certain factors. The payments will be increased for extraordinary medical injuries, such as multiple surgeries (re-revisions) or infections and other medical complications suffered as a result of revision surgery.

Stryker began selling the Rejuvenate hip system in 2009 and the ABG II hip system in 2010. Two years later, Stryker recalled these hip implants due to "fretting and/or corrosion" in the implant which could result in metallosis (release of metal ions into the tissue and blood stream) and ultimate failure of the hip implant.

The deadline for eligible patients to submit their claim for payment under the settlement is March 2, 2015.