RE:RE:Olympus Cops a Guilty Plea x 3 for $85 M!!Olympus is, IMHO, in a very difficult position going forward. It is important to past and present plaintiffs that they have admitted to not complying with regulations that they needed to report problems or incidents of contamination and injury/death following use of their scopes in 2012-13 and one of their executives may face criminal charges. This will be a key point for the plantiffs in the many (?50) lawsuits that are presently being pursued in the US and elsewhere against OEM's, principally Olympus. Olympus and other OEM's should have advised all users, and made available to patients, that there were and are contamination issues with their scopes. Olympus put aside $85 M in the last quarter anticipating this plea deal with the DoJ but they have put nothing aside for the costs of litigation and settlements. These could be a much much larger expense for Olympus, at the very least, IMHO equalling their DoJ settlement for bribery of $500 M recently.
However, these findings today by the FDA's post-market surveillance program leave all three of the OEM's in a very very difficult spot. While the exact reprocessing procedures for the scopes found to be contaminated has not yet been analysed according to this FDA communication, the end users were complying with FDA reprocessing and cleaning recommendations from 2015 and 2018, and they still have a 6% contamination rate. As everyone will easily appreciate, this is simply completely unacceptable. And, it implies that Olympus's argument in response to litigation which is that the contamination problem is entirely due to human error, or reprocessor technicians not following IFU's or FDA guidelines, is not valid. While this FDA communication does not state how many of the contaminated scopes where also found at institutions where reprocessing technicians needed further instruction and guidance, if all of the contamination problem had been related to human error this would have been obvious in the data and quickly communicated in this press release to end users. That this was not the case and that the FDA needs to further examine the data to see what other factors, if any other than the fact that these are complex multichannel scopes and not amenable to adequate decontamination with HLD (and supplimental processes advised in 2015 by the FDA), shows that OEM's have a problem:
the present reprocessing IFU's and other recommendations don't work on these complex scopes. Are Olympus and the other OEM's putting patients at too much risk at a rate of 5% contaminated duodenoscopes despite complying with recommended reprocessing practices? There are 500-600k of these ERCP procedures are taking place annually. Are these OEM's not obliged to mitigate patient injury/death to the best of their ability in light of the contamination issue being related to something to do with the scopes, and not to human error. The VP4 is a practical, effective, efficient and cost-saving device that would solve Olympus's problem. Could Olympus be seen as at fault for not simply recommending the VP4 to eliminate the contamination issue now that the FDA has given TSO3 approval for duodenoscopes and colonoscopes and has identified that the problem is ongoing?
These are the reasons I stated that I cannot understand why Olympus has not already made a hostile bid for TSO3. Perhaps they are imminently about to do so? For the cost of future and present litigation Olympus could own TSO3 many times over even for a paltry $2 US/share. I don't understand the Japanese corporate approach, I confess. IMHO, our CEO believes this company is and wilI be worth $5-8+/share especially once we get more market traction, but it presently mired below .50 CDN following dumping by a couple of funds and retail tax loss selling! The company is supposedly not for sale, but all companies are for sale at the right time to the right bidder. If Olympus acquired TSO3's technology for a song at $2 tomorrow and sold VP4's along with their scopes, they should have eliminated their problem, be best in class 'good health care providers', have huge market penetration and income, and, most importantly to Olympus, no longer be liable to legal costs of settling law suits from now on.