On August 24, 2018, a subsidiary of Zimmer Biomet Holdings, Inc. received a Warning Letter from the U.S. Food and Drug Administration (the
FDA) related to observed
non-conformities
with current good manufacturing practice requirements of the Quality System regulation at our North Campus manufacturing facility in Warsaw, Indiana
(Warsaw North Campus). We take the matters identified in the Warning Letter seriously and are in the process of preparing a written response to the Warning Letter.
The Warning Letter is specific to our Warsaw North Campus facility. As previously disclosed, the FDA performed an inspection of the Warsaw North Campus
facility in 2016 and issued a Form 483 with inspectional observations at the conclusion of the inspection in late 2016. Also as previously disclosed, the FDA performed a
re-inspection
of the Warsaw North
Campus facility in April 2018 and issued a Form 483 with inspectional observations at the conclusion of the
re-inspection.
We have provided written responses to the FDA detailing corrective actions underway to
address the FDAs observations and have provided, and will continue to provide, regular updates to the FDA regarding our quality remediation plan at the Warsaw North Campus. While the Warning Letter acknowledges our quality remediation plan and
actions weve already taken to address the FDAs inspectional observations, it notes violations that require additional action or explanation. In the Warning Letter, the FDA proposes a Regulatory Meeting with us to discuss the proposed
corrections.
We will continue to work expeditiously to address the issues identified by the FDA and we intend to respond within fifteen business days to
the Warning Letter. We expect that the proposed Regulatory Meeting will take place subsequent to the submission of our written response to the Warning Letter. Meanwhile, the Warning Letter does not restrict production or shipment of products from
the Warsaw North Campus facility or require the withdrawal of any product from the marketplace. Nor does it restrict our ability to seek FDA 510(k) clearance of products. The Warning Letter states that requests for Certificates to Foreign
Governments will not be granted until the violations have been corrected. Additionally, premarket approval applications for Class III devices to which the Quality System regulation violations are reasonably related will not be approved until
the violations have been corrected. We presently have no such applications before the FDA.
We believe that the FDAs concerns set forth in the
Warning Letter can be resolved without a material impact to our financial results. We cannot, however, give any assurances that the FDA will be satisfied with our response to the Warning Letter or as to the expected date of the resolution of the
matters included in the Warning Letter. Until the issues cited in the Warning Letter are resolved to the FDAs satisfaction, the FDA may initiate additional regulatory action without further notice. Any adverse regulatory action, depending on
its magnitude, may restrict us from effectively manufacturing, marketing and selling our products and could have a material adverse effect on our business, financial condition and results of operations.
Cautionary Statement Regarding Forward-Looking Statements
This report includes forward-looking statements within the meaning of federal securities laws. Forward-looking statements may be identified by the fact that
they do not relate strictly to historical or current facts. They often include words such as believe, may, could, will, expect, continue, anticipate,
intend, estimate, plan and similar expressions. These forward-looking statements are based on current beliefs, expectations and assumptions that are subject to significant risks, uncertainties and changes in
circumstances that could cause actual results to differ materially from the forward-looking statements. These risks, uncertainties and changes in circumstances include, but are not limited to, the success of our quality and operational excellence
initiatives, including our ongoing