* Recall after two implants malfunctioned
* Too early to predict impact on Advanced Bionics results
* Shares down 7.2 percent
(Adds shares, analyst comment)
By Emma Thomasson
ZURICH, Nov 23 (Reuters) - Swiss hearing aid maker Sonova Holding AG said it was recalling a cochlear implant due to a rare malfunction, sending shares down sharply, adding it was too early to predict the impact on results.
Sonova subsidiary Advanced Bionics said on Tuesday it had notified the U.S. Food and Drug Administration that it would voluntarily recall its HiRes 90K implant device worldwide after two instances of malfunction.
"These recipients experienced severe pain, overly loud sounds and/or shocking sensations, at eight to 10 days after initial activation of their device," Sonova said.
It was too early to say what impact the recall would have on sales and operating income for the rest of the 2010/11 fiscal year for Advanced Bionics, but it would communicate this as soon as possible, Sonova said.
Sonova shares were down 7.2 percent at 124.10 francs at 0838 GMT, underperforming a 0.5 percent weaker Stoxx European 600 healthcare sector index.
"The short-term financial impact from the recall will be small. But the long-term "Buy" case of many investors is based on a success of Advanced Bionics," said Vontobel analyst Christoph Gubler.
"The current issue proves that the risk profile of Sonova has changed to the worse with the acquisition of Advanced Bionics," he said, adding he expected the group to represent about 7 percent of Sonova's revenues for the full year.
Sonova announced its buy of Advanced Bionics for $489 million in cash a year ago, increasing its share of the hearing health care market to around 25 percent, ahead of rivals Siemens and William Demant.
Advanced Bionics has a share of around 18 percent of the $750-800 million per year cochlear implant market. Cochlear of Australia is the segment leader, with an almost 70 percent market share.
Sonova said last year it expected the cochlear implant market to grow at between 10 and 15 percent annually and that it aimed to double Advanced Bionics sales in three to five years. (Editing by David Holmes and Jon Loades-Carter)