Good day, and welcome to the Getinge Group Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Johan Malmquist. Please go ahead, sir.
Well, thank you very much, and thank you to all of you for joining us on this call at such short notice. On our side, it's myself here and Ulf Grunander, our CFO. And let me start off by extending a very sincere apology for the cancellation of our Capital Markets Day that came at such short notice. We understand that this is an inconvenience for many of you and that you need to plan your time carefully, and that you are busy, all of you. So a very sincere apology for that. I'm not planning for a lengthy introduction before we open up for questions, but I would like to say just a few words.
I feel that we have been open about the fact that we have an ongoing dialogue with the FDA, and that despite the significant efforts that we are undertaking to quality management system within our business area Medical Systems, there are sort of outstanding risks associated with the outcome of those discussions that could have a financial impact on our business. Now, when we planned for the Capital Markets Day, we deliberately put it out in time, or we put a date far enough into the future in the hope that we believe that we would have better visibility and oversight on the ongoing discussions. Then late last week, in fact, Friday, we received additional information that raised, I would say, the level of uncertainty when it comes to the outcome of the discussions and the potential impact on our financial performance.
As a consequence, we felt that we could not elaborate on our financial ambitions with the confidence and transparency that we wanted, and, which was also the sort of central theme of the Capital Market Day that we had scheduled. Where things stand right now, the reality is that we ourselves need to get more clarity on this new information, and there are sort of tentative meetings scheduled to continue the dialogue with the FDA. But this is really, I would say, all I can say at the present time. And we, of course, appreciate that this is not a lot to go by. I could say this, though, that for those who speculate in a connection around the Class I recall of our intra-aortic balloon pump that was announced last week and this new situation, then there is none.
In fact, at the present time, our intra-aortic balloon pumping business has not been the subject of discussions with FDA at all, and they're not sort of under any outstanding Form 483 observations, any warning letters, and so forth. I just wanted that to be clear for the records. So I think with that, we're ready to take questions.
Thank you. If you would like to ask a question at this time, please press the star or asterisk key, followed by the digit one on your telephone. If you find that your question has already been answered, you may remove yourself from the queue by pressing star two. Again, please press star one to ask a question. We'll pause for just a moment to allow everyone to signal. Our first question comes from Michael Jüngling of Morgan Stanley. Please go ahead.
Great, thank you, and good morning. I have two major questions. Firstly, the additional discussions that you're having with the FDA, is this in relation to all of Getinge, or is this in relation to Medical Systems only? And secondly, would you say that the risk now of an FDA warning letter for a large number of facilities is now more likely than it was perhaps when you first communicated this information, I think back in March? And then thirdly, you mentioned it may impact your financial performance.
Are you talking about that you may have additional FDA costs, or are you talking about the underlying business being impacted, meaning it may impact your organic growth rate or order books, and also your margins on an underlying basis? Thank you.
Thank you, Michael. If I fail to answer your two—I believe there were three—then please repeat them for me. But I believe your first question was if sort of the scrutiny is sort of beyond what we have communicated earlier, which is not the case. This is sort of a Medical Systems situation. It hasn't sort of extended beyond that. And you never know, but recent inspections in the other business areas have sort of been with a good outcome, with minor or no observations, and they have been subject of audits by the FDA in the recent year. Would there be sort of a broader, you mean like a corporate warning letter or a Medical Systems-wide warning letter?
I honestly don't know. I think that it would be more likely that there could be potentially additional warning letters on other facilities, but it's difficult to say at this point in time. And I think your third question, if I, and again, please remind me if I missed the point there, but I think the financial impact, is it more costs associated with the remediation work? No. The remediation plan we have, which we hope to conclude sometime in the middle of next year or possibly a little bit into the early part of the second half, and the cost, the SEK 800 million, we're not planning on modifying that, and we still believe that is the appropriate amount to complete the work.
So when we talk about other financial consequences, I would say that sanctions that FDA can impose on any company that operate in our environment would probably fall under two broad categories, fines or penalties. The other category would be restrictions in supply to the market.
Okay, thank you. Then, a follow-up question on sort of the other financial sanctions. As you know, Johan, we've been receiving some of the FDA information through the Freedom of Information Act, and it seems if you read those Form 483, many of the issues were in relation to not having enough proper documentation of procedures, etc . What's happened over the last sort of 4, 5, 6 weeks that perhaps makes the situation not just procedural related, but perhaps also maybe sort of quality related? It seems that something has changed materially in the last weeks.
No, I would maybe not describe it, apart from this recent event that I sort of can't go into, but it sort of was, if I phrase it, a somewhat surprising turn of events in our dialogue. But I think that if we say where we are now, one needs to recognize that the level of performance of our quality management system, our ambition is to take it to a level where it is beyond reproach, to the best possible level.
That will entail addressing, shortcomings on multiple levels, which can be procedural, they're around how we act consistently across the entire business area, what we've talked about, an effective and efficient complaint handling system, and consistencies in how we handle corrective actions, preventive actions, what we do to strengthen the, the management team responsible for quality and regulatory. So, it is really an action plan on several levels, and I don't think that one can, a ctually, any of those could potentially be, be sort of, severe enough on, on any of these levels to, cause FDA to have concerns or, or raise concerns or, or, ultimately impose sanctions.
And finally, Johan, was there a reinspection recently that has changed the turn of events as you described it, or is it based on old findings, and that based on the old findings, there's been a turn in events?
All of this, I would say, dates back to the series of, well, it's, it's I think with, with, but for the maybe for some in the audience here today who sort of haven't been sort of participating in the overall story, I would say that the whole journey we're in started back in 2010, where one of our facilities, the facility based in Wayne, received a, or had an inspection, a full course inspection, that resulted in a Form 483, which then resulted in a warning letter, and that warning letter hasn't been closed out, which in itself is unacceptable. That situation then—well, that situation is what it is, if you will.
Then we also ended up with a warning letter in our Atrium facility in Hudson, New Hampshire, which was also a -- that was also, in a way, a full-course inspection. It was an inspection that was associated with a PMA application for the iCast, one of our covered stents. And those observations ended up in a warning letter in the end of the day. So that is, those are the warning letters. And then FDA conducted through from the middle and a bit into the autumn of last year, a series of inspections of our non-U.S. facilities, which generated sort of a series of observations.
This is also when we communicated to the market, when we had the full understanding of the outcome of those inspections, we communicated that we would take measures to quality management system within Medical Systems. And then when we had the further information, we announced SEK 800 million as being the cost of bringing necessary remediation. So that is what has transpired, if you will. And yeah, that's where we stand today.
Thank you.
And I think that, w ell, let me just add and say that when you—it doesn't take a lot of imagination that when the FDA had scheduled a relatively large number of inspections of non-U.S. facilities, I think we obviously realized that the FDA are unhappy with our performance. So we initiated ourselves, obviously, this plan of quality management system up to a standard where it is beyond reproach.
Thank you.
We will now take our next question from Hans Møller of Handelsbanken. Please go ahead.
Good morning, Hans Møller. First, what kind of financial headroom do you have for possible fines? And then secondly, on the first five months of the remediation work, have you got any feedback from the FDA on that, or has the discussion recently been on previous issues? And lastly, also, have any of the recent discussions been involving the other two business areas, or is this 100% on Medical Systems? Thanks.
Yes. I'm not sure I understand your first question, Hans, on do I have headroom? What do you mean by that?
Yeah, if we put it this way, you typically describe how much room you have for acquisitions. I guess, there's another figure, what kind of fines you have the capacity to pay, if I put it that way.
Yeah, yeah. Yes, I would think so. Yeah, absolutely. And the second one, the progress, I mean, we made good progress on our remediation work, I would say. And so, I mean, firstly, on the people side, we've made changes and reinforcements. And I think it is important that we demonstrate that we take actions, and it's not the same to say that we sort of indiscriminately remove anyone who's had a position there before. But I think that part of the outcome or where we find ourselves today is possibly that we haven't had, at all places, the competence necessary. So that has been a top priority for us.
We have also made changes on the leadership side in general, to ensure that we have people who understand that our foremost responsibility is to look after patient safety in our industry. So those are personnel changes. Those are implemented since a while back. When it comes to the actual remediation work, so we have, as you know, retained consultants, and we have highly qualified consultants guiding us in the remediation work. And these are consultants with good standing with the FDA, who occasionally also undertake inspections and work on behalf of the FDA. So these are the individuals, and what they will do is they will sort of give us their opinion.
They would inspect our existing facilities and say, "This is where you should be, and this is where you is." The gap is sort of the workload that we have to close now, ASAP. I would say that I'm happy with the progress that we have made over these first, let's say, five, six months or so in our remediation work. It doesn't rule out the others, but I think we're showing that we take the situation extremely seriously. We're committing the resources to do it. We haven't tried it. We've made our point on what it is to be a leader in this business in terms of what is your first priority, and patients.
So yes, I would say we've made progress on more than the actual work, I would say, on other importantly, sort of aspects of culture and so forth. Your last question, Hans, could you please repeat that?
Was regarding if any of the very recent discussion has been involving any of your other business areas?
No, no. The other businesses, I think that all the inspections, to the best of my knowledge, and there's been a handful of them last year, have been conducted either without observations or with minor observations that have been closed out. We have one outstanding inspection of our Polish facility, where we haven't received, w e got a Form 483. We haven't received the final feedback on that inspection.
Okay. Thank you very much.
Thank you.
Our next question comes from Kristofer Liljeberg of Carnegie. Please go ahead.
Yeah, hi. Good morning. My first question is that if there were only a risk or an uncertainty about the size of a penalty payment, would that be enough for you to postpone the event on Tuesday?
That's speculative. I don't know, Kristofer, but it's not what the situation is about.
Okay. But then the follow-up is, of course, to make sure that I understand you correctly, it seems that you have got more in the discussion from FDA now on Friday, that you have got something, they have said something that make you more nervous, that there might be delivery restrictions also from facilities outside the U.S. Is that correct?
No. I mean, we need. There is a situation where we need clarity, which we don't have today, and which we will seek as soon as possible. And unfortunately, the United States is on a public holiday today as well, so we haven't, and we won't be able to progress those discussions by a lot here in the near-term future. And this is maybe a little bit the unfortunate thing. I mean, we would sort of welcome clarity ourselves at the earliest possible stage, but these things don't move very quickly, right? So when we rescheduled our capital market date for the 27th of May, it was really with the ambition of having clarity over the situation.
you could argue that the opposite has sort of happened here over the last couple of days. So it's really all I can say about it without it becoming sort of very, very speculative.
How does it work? Do the agency give a heads up normally if they plan to introduce some restrictions on delivery, or is it just a decision that comes from nowhere?
Yeah, there is, and I would maybe call it under normal circumstances, there is an escalation of a situation, and it typically follows the procedure of an inspection, observations, your response, written response to those observations, feedback from the FDA that could come in the form of a warning letter, and possibly together with sanctions. But normally there is a degree of escalation and an exchange of sort of opinions, clarifications of things that are unclear to the FDA, and so forth. So, it's typically not out of the blue, no.
Okay. And if we take the two sites in Wayne and in Atrium, could you disclose how much of sales going to the U.S. from those two sites?
I don't have that with me here, no.
Okay. Thank you.
Thank you.
Our next question comes from Mattias Ahlbom of Danske Bank. Please go ahead.
Good morning. Thank you. Three questions, please. You mentioned tentative meeting scheduled with FDA. When in time is the next meeting due, and at what level within Getinge will those take place? Are you as CEO of the group attending, or who is the highest responsible member of Getinge management attending?
Well, it is, as I said, tentative, so we hope to have it in the near-term future. And we haven't received confirmation from the FDA exactly when the meeting, but we're attempting, and we're hopeful that we might be able to schedule something towards the end of the current week. And the attendance, I would say, is still a little bit to be defined. I mean, we will obviously, if need be, be stand by all of us, and but I think it's also subject to confirmation from the administration to see the nature of such a meeting and what is appropriate in terms of attendance. So we take this seriously, and therefore, and we obviously have advisors engaged in this who are very experienced.
We've had them for the entire process, right? So, if they deem it suitable for me or for Heinz Jacqui, who heads up Medical Systems, then we shall be there.
Okay. Second question, there's a small, but in my view, distinct difference in the Swedish and English version of the press release. Swedish version says that at the future CMD, in addition, you will give an update on latest progress of being made in the strengthening Medical Systems quality management system. But the English version doesn't mention in addition. This leads me, at least, to believe that the new term with FDA is unrelated to quality management system investment, related to something new. Am I right in thinking so?
No, this, this is a very integrated situation. I would maybe take that down to translation and nothing more. We've learned by experience to extremely careful when we look at the Swedish and the English versions on outlooks in our press statements from past experience. So this is possibly just a slip, which there's nothing intentional around that.
Okay. My last question then, I struggle a bit to understand why you couldn't host the team, avoid talking about FDA-related issues, and instead talk about the planned savings from the program that relates to shared financial services and purchasing, and still, so to say, I mean, do they tie together in some way, or is the FDA issue of such magnitude that you need to have it sorted out very clearly before you can talk about any future savings and margins?
I think it's a matter of for us as well, visibility and certainty. I think that we want to, since the main theme was around our financial performance. I think our idea was to give sort of how we saw our profitability evolve over the coming 5-6 years, and maybe group that into a short to mid and sort of the outer end of that time range. We can't rule out that the short term may have sort of impacts that result from any ongoing discussions we have with the administration. Although we don't know that by size or anything, to be quite honest.
So I think we had, and we've of course continued to have a, I think, a very good plan and one that I would have enjoyed presenting to you, and one that we will present to you with joy at some future point in time. But we felt strongly that this was too much of an uncertainty, and my experience is that numbers are sticky, be that short or long term. And we wanted to be very transparent that right now we have an uncertain situation, and unfortunately, I think that you will have to live with that uncertainty for a period of time. I mean, if I was to guess, I think this can last months, until we have.
The type of clarity where we can accurately, if anything becomes a certainty, we will obviously communicate around that. But the way things stand right now, I think it's gonna be a while before we have the type of clarity that we would like to elaborate around our financial ambitions with confidence.
Quick follow-up. When do you plan to kick off the new savings program? Because I guess there are some restructuring costs-
It's in progress.
It's in progress, but-
Yeah, yeah, we have initiated. I mean, we have the people who are gonna run these programs are hired, they're in action. It's early stages, obviously, but we'll obviously try and advance that as quickly as possible. Absolutely.
But I would have thought that, it would have required some restructuring cost as well.
Down the road, it will. But I would say in this current year, I would say that we have, I mean, this was known to us already at the planning time for this year. So we have factored in those early investments and costs and consequences into our 2014 plans. And then those programs will intensify, and so there's a stream of costs and savings, etc . And we'll simply have to leave the communication of those programs, in more detail, to a later date.
Thank you.
Our next question comes from Richard Koch of Kepler Cheuvreux. Please go ahead.
Hi, Richard Koch. The Friday information, was that not expected at all, or was it just much stricter than, than before, or was than, than you had expected?
I would phrase that not expected at all, if on, on your. That would be my direct answer to that very direct question. But then again, it's, it's, it's a little bit inherent in, in, this ongoing dialogue that there will be things popping up, I think, from time to time. And, but, but this obviously, in, in our judgment, was severe enough to, to provoke this change. I mean, I think we have expressed that there is an outstanding risk, but, but this one sort of made it more tangible in a sense, you could say.
And when do you expect more clarity? You mentioned it could be months, but, c ould it be a year, or could it be even longer?
No, I don't think so. I think the sort of a good judgment of the time it might take.
Okay. A previous question touched on this, but I need to ask you a bit more, in a bit more detail. But in a worst-case scenario with restricted deliveries, for how long could those restrictions be? And what amount of sales or what percent of sales would then, in a worst case, be at risk? Would that be all Medical Systems sales in the U.S. or only from these two factories?
Your first question, sorry, that was quick, as I try and answer them in the order you.
If you would be restricted in selling, for how long could that be, or normally, or would.
Well, that was the second question, I believe. You asked the question before, right? Okay, I think that the length of any sanctions is correlated to, I would say, two things, and one is obviously the status of your compliance, which means that if you've undertaken the remediation work and there are no cause for restrictions, if they were imposed, then that would be the time, and then there may be a delay until the agency has the resources to undertake a reinspection, if that is. That would be sort of, I think, the answer you would get from the highly generic answer to your question.
And I would say that the length is all dependent on where you stand and how much work you have completed and so forth.
What amount of sales could be at risk?
There is no such calculation. We're not at that stage, so we're in discussions now to gain more clarity, but I think you have that in our annual report if you wanted to get the entire business. So it's no secret, but that's not the discussion we're having.
Yeah, but what I don't know is whether if they are angry only with these two factors or if they're angry with the whole medical systems in the U.S.
Part of that you share with me, because this is what we're saying, we have uncertainty here, so we don't have the answers to those questions. We obviously know how much we sell in the United States, but we don't have the clarity to provide answers to these questions.
Okay, thanks.
Thank you, Richard.
Our next question comes from Scott Bardo of Berenberg. Please go ahead.
Yeah, I just wanted to ask two points, please. So the fact that the situation appears to have escalated somewhat since you announced a remediation plan, and does that signify that the FDA are not satisfied with your plan as it currently stands, or is that not the correct conclusion? So that's question number one. And second question would be you talked about some of the progression of escalation historically from a Form 483 to a warning letter in those two U.S. facilities. Just listening to the call today, it sounds to me that the potential next stage would be then to perhaps receive a consent decree from one of those facilities.
I just wondered whether you could talk about whether that is a real risk or something that's not currently a topic of discussion. Thank you.
I would, I mean, to avoid ending up sort of in a situation where I said one thing and something else, I mean, this is an open situation, and as we've said, we don't know the outcome of it. I think that would be a possibility, but in fact, we don't know.
The first question was if you believe that the FDA is satisfied with the present plan?
Yeah, I mean, the present plan is designed together with consultants who have ample experience in these matters. And I would say that what we're aiming for is obviously a satisfactory level. What I think FDA needs to concern themselves with, at any point in time, is if the current products coming out of our factories are safe. We obviously believe so because we are shipping them, but that's where there may be a difference of opinion. But I would say that is what would provoke the FDA to say that they impose shipment restrictions on a company, that they would deem that quality management system is not strong enough to guarantee patient safety.
Okay, thank you. Just one follow-up, please. It's my understanding that the products that you manufacture from Wayne and in New Hampshire largely have market-leading shares, market shares for those product groups. Obviously, if there is some sort of sanctions or shipping restriction, do you envisage a possibility that you would lose some sort of market share in those products, or that there would actually just be a national shortage or a U.S. shortage of those products?
Without having any detailed knowledge, but sort of my working knowledge would suggest that the administration would, of course, investigate to the best of their abilities to try and balance sort of safety with the ability to provide therapy to patients, right? I mean, I think it's fair to say that we deal with patients who are already sick, and events happen in this industry, not specifically with us, but with a lot of companies that happens. So I think they would balance what I would possibly call the medical necessity of something versus the need to impose or the wish to impose sanctions.
As I'm sure there are sort of quite difficult deliberations they have to make from time to time.
Okay. And just lastly, on risk mitigation, if, for example, those two facilities in particular are of acute focus for the administration, is there any ability that you could mitigate manufacturer risk by a quick fix, transferring production to perhaps some of your French facilities that arguably have a cleaner bill of health? Is that a possibility that you envisage, or under the current discussion framework, is that more difficult scenario?
I think that's not a likely scenario. I mean, we haven't been reasoning in that direction, and we're sort of trying at least, things pop up, but we're trying to focus on the remediation work on putting these businesses in good standing order. And I think on a very practical note, if you consider the amount of validations, etc. , I think that these type of transfer, in theory, were they to be contemplated, would require significant time to take place. So I would say no to that question. Our case is, let us work on our plan, as quickly and as diligently as we can, and keep a good dialogue with the FDA, that we take this serious. We're committing resources.
We're making progress. We can demonstrate that we're making progress. It will probably be a discussion, is it enough progress? But, we're moving in the right direction.
Okay, thanks very much for my question.
Thank you, Scott.
Our next question comes from Johan Unnérus of Swedbank. Please go ahead.
Good morning, and thanks for taking my question. Johan Unnérus, Swedbank. Yeah, firstly, sort of summary or impression, it seems like the scope of the FDA process has moved beyond procedure into some sort of quality-related stage and also with some risk of production and delivery disturbances. Is that correct?
Again, it's, you're sort of speculating and, and I've tried to convey here now, and I obviously understand that you want to seek certainty around this, where there is none to be found, unfortunately. So, we can just say that the dialogue we have with the FDA has new information that come to our attention that makes the situation more uncertain. And, we learned about this late last week, and we have sought a meeting, or we've sought a meeting with the FDA to clarify the situation. And, that meeting hasn't taken place. So, it is an uncertain situation here today.
But, we also underline that the, sort of if you follow that, event and the line of thought, it could have financial consequences on our business. But, we really, we really need to understand more.
It is not possible to rule out disturbances for a thought or a few products?
No.
Right.
No, I think I can answer that. We cannot rule. That wasn't the case before. And if you know, if we had thought that we could rule out sort of consequences in terms of restrictions on individual product lines or facilities, etc. , we wouldn't have talked about the remaining financial risk. So in our mind, that has sort of been a possibility. We obviously work to minimize or eliminate that risk, but that risk was there before we sent out this press statement or the week before, if you will, and that risk still remains here. So from that perspective, nothing has changed, really.
And finally, it took quite a long time before, between the initiation of sort of inspection for the process, and then until you got to a stage where you can specify financial results and consequences. I mean, given that amount of time, it seems unlikely that this process will probably take some time as well. We shouldn't expect-
Yes
A Capital Market Day before, before September, perhaps?
I don't know, as soon as we can. But this time around, I think it's always easy to be smart after the event. I think that initially, we had sort of simply said that we're gonna hold the Capital Markets Day at the later stage without specifying when. I think that we were persuaded that this was essential for the better understanding of Getinge. We put it at a date, as I said earlier, where we hope that we would have significantly more clarity, and this is not the case. So I don't want to repeat the same mistake again, but I think we need to talk months, and we're obviously not gonna put it in the middle of the summer.
So, maybe likely after the summer at some point in time, hopefully sooner rather than later.
Perhaps another call, call update in between?
If we have something to report of materiality, we will do so. So anything that we feel investors and analysts and so forth have a right to know, we will let you know.
Okay. Thank you very much.
We will take a follow-up question from Michael Jüngling. Please go ahead.
Great, thank you. I've got, I've got two more questions. Firstly, will the development with the FDA over the end of last week result in more senior management changes? And secondly, have the developments included perhaps some sort of fraudulent developments amongst some of your staff that may bar you from selling it to Medicare, to Medicare or reimbursement of Medicare and Medicaid? This often can happen when, sort of fraudulent activities happen, that would be a useful data point. Thank you.
On the first one, I don't want to—I don't know what you mean by that, but we have made changes. I am certainly not aware of any changes that we would like to make internally or from my perspective. And I must say, I'm not privy to any discussion the board may have had about my own position in as part of this. So that question, if you depending on who you refer to, you should maybe ask someone else. But from my perspective, and with my management team, it's the right team in place to fix this problem.
And to the best of my knowledge, there is no, I know what you're referring to, Michael, and there is no sort of fraudulent or criminal, again, to the very best of my knowledge. But there is no, as I know of any criminal behavior, if we call it that, that might impact the government's willingness to pay or the state's willingness to pay for products we have had. And I think sometimes when products are under reimbursement and there's been, like you suggest, fraudulent behavior, then penalties can be quite severe. So there is no such thing, really, to the best of my knowledge.
Okay. And one follow-up to my earlier question, because I'm still a little bit uncertain. The additional information that you have sort of received late last week was that information based on subsequent inspections by the FDA, or was that based on the information from the previous months, from the previous 12 months, that perhaps has led to the uncertainty that we are now facing?
Yeah, more or less, not any recent events, Michael. It's the data collection. If I look sort of from the administration's perspective, the data collection is sort of based on inspections, and then obviously the subsequent exchange of correspondence and data we provide to demonstrate the progress we're making. So we are sending systematically data informing the administration of the progress we're making on different on the remediation program we have in place. So this information, if you will, is sort of based on that historic trail of the inspections and exchange of correspondence between the administration and our group.
Thank you very much.
Okay. Shall we take one more question here? I feel that considering that I can't answer the questions as to the extent I'm sure you all wish, and I wish myself, we can maybe take one more, but with a risk of sort of going around in circle, we can maybe wrap up after that.
We will take our last question from Patrik Ling of DNB. Please go ahead.
Yes, good morning, everyone. Just, just a clarification, Johan, on the, on the train of events here. When, when the FDA do an inspection, and they have observations and so on, and they come back, do they need to issue a warning letter before they impose any sales or, or shipment restrictions, or could they do that without a warning letter? The question is, are we talking only about potential shipping restrictions at this point in time from the U.S. facilities, or is there a risk that you could see shipment restrictions from Europe going into U.S. without a warning letter for those factories?
I'm not sure I'm the right person to answer that question. I think it depends on, on, then under normal circumstances, I would say that, if you say, take an isolated plant that has been subject to an inspection by the FDA, and that situation escalates through a Form 483 response. FDA's possible belief that the response is inadequate or incomplete, and say that you eventually end up with a warning letter, and then that they impose some form of shipment restrictions, that would probably be the most normal course of events. But, if you are.
And then there are other routes, if you have a sort of wider context, then I think one needs to remember that what is a little bit at stake here. I think one needs to understand is that the multiple inspections is really to tell us that our issues is a little bit more on a systemic level, and that we need to implement, in addition to remediation work at individual sites, also put in place a comprehensive quality management system covering all of the facilities within Medical Systems. So, the answer, I think, to your question, will probably differ a little bit depending on where you stand in discussions with the FDA.
Okay. So, yeah, great. Good. Thank you for the answer.
Thank you. Okay. With that, I suggest we conclude here. You're obviously, as always, free to call Ulf or myself, but I'm afraid that the we tried to signal here throughout the call and also in our press statement is that the situation is uncertain, and there's not gonna be any, I believe, not any immediate additional information that will make that uncertainty go away in the short run. But you can rest assured that when we have more certainty, that we will share that with you ASAP. And we also hope that we will have the opportunity to be more firm on when we can put a new date in the calendar for the Capital Markets Day.
I really believe that we had some interesting and good things to tell you about, but that will have to be saved now for a later moment. So with that, thank you for spending time with us this morning, and to be continued. Thank you very much.
That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may disconnect.