US Rival Makes Cochlear Shares Drop Anew

Cochlear (ASX:COH) shares crashed anew after rival Advanced Bionics (AB) made a comeback in the US market. Days after the biotech company recalled its Nucleus hearing implants, shares dropped over 15 percent to $51.01 before closing at $51.30, down 14.64 percent.

Sonova-owned competitor Advanced Bionics said the Food and Drug Administration had cleared the company for re-entry into the US market after it recalled its HiRes 90K implant last year. AB is awaiting FDA approval for its Europe re-entry.

Since Monday's recall, investors have slashed nearly $1.2 billion off Cochlear's market value. In hopes to retain 75 percent of its share in the implant market, Cochlear plans to step up production of its Nucleus Freedom implant, a substitute for the recalled CI500 line.

UBS analyst Andrew Goodsall said AB's return "could not come at a worse time for Cochlear." He also said: "We are already getting feedback that clinics in Europe have brand choice and are likely to give more market share to competitors for now; with AB's re-entry to the US, this brand choice will now be available in the US."

AB's latest recall happened after two devices were pulled due to malfunctioning and causing loud sounds and pain. Cochlear said its implant users, on the other hand, were not injured by the failed devices.

AB holds about 10 percent of the global implant market. Unlisted MedEl has a 15 percent share.