Steris Corporation Faces Shareholder Investigation

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An investigation on behalf of Steris Corporation (Public, NYSE:STE) over potential violations of Federal Securities laws by Steris Corp and others.

According to the investigation by a law firm, the investigation focuses on the following events. On December 4, 2009, Steris Corp. disclosed that it had been notified on December 3, 2009 that the U.S. Food and drug Administration (“FDA”) had issued a notice to healthcare facility administrators regarding the regulatory status of the STERIS SYSEM 1 ® Sterile Processing System, as well as actions healthcare facilities should take if they use the device. According to the excerpt below from the notice dated December 3, 2009, the FDA said that Steris Corp. had not stopped marketing the device or shifted customers to replacements as it had agreed to do in January 2009:

“STERIS Corporation (STERIS) has significantly modified the SS1, and FDA has not approved or cleared this modified product. Thus, FDA has not determined whether the SS1 is safe or effective for its labeled claims, including claims that it sterilizes medical devices. Use of a device that is promoted to sterilize or disinfect a medical or surgical device, but that does not properly perform these functions, poses risks to patients and users. Improperly disinfected or sterilized instruments may transmit pathogens to patients and healthcare staff, or expose them to hazardous chemicals. Improper sterilization or disinfection may also adversely affect the quality and functionality of reprocessed instruments.[…]On May 15, 2008, FDA issued a Warning Letter advising STERIS that its changes to the SS1 caused it to be adulterated and misbranded under the Federal Food, Drug, and Cosmetic Act….In response, STERIS stated that it would work with its customers to transition them to legally marketed replacements for the SS1. On January 20, 2009, STERIS advised its customers of this commitment and the steps that it would take to respond to FDA’s concerns. However, based on a recent inspection of STERIS and meetings with the firm, FDA is not satisfied that the firm has been working effectively to transition its customers to replacements for the SS1. FDA is therefore sending this letter to make recommendations on actions that you should take.”

In response to the concerns the FDA has expressed about the STERIS SYSTEM 1 Sterile Processing System Steris Corp. issued on December 07, 2009 Steris Corp. a letter to its customers.

Shares of Steris stock (STE) declined about 18 percent since the close of market December 03, 2009, from a high of $33.65 to $27.20 as of about 2 p.m. Dec. 11, 2009.

STERIS Corporation, located in Mentor, Ohio, together with its subsidiaries, develops, manufactures, and markets infection prevention, contamination control, microbial reduction, and surgical support products and services for healthcare, pharmaceutical, scientific, research, industrial and governmental customers worldwide. The Company offers its customers a mix of capital products, such as sterilizers and surgical tables; consumable products, such as detergents and skin care products, and services, including equipment installation and maintenance, as well as the bulk sterilization of single-use medical devices. STERIS Corporation reported in 2007 Total Revenue of $1.26509billion with a Net Income of $77.11million and in 2008 Total Revenue of $1.29853billion with a Net Income of $110.69million. Shares of Steris Corp. (STE) traded recently at $28.34 per share, down from its 52weekHigh of $35.42 per share and almost $38 per share in 2008.