Eargo, a maker of hearing aids, said it plans to start selling its devices in retail stores in 2022 after the Food and Drug Administration cleared the way for over-the-counter sales this week.
The company will need to make sure the devices meet the FDA’s requirements, Eargo said in a statement on Wednesday.
Hearing aids can only be sold over the counter to adults with mild to moderate hearing loss, according to the new FDA regulations announced on Tuesday.
In its final guidance, the agency also lowered the maximum sound output slightly, added limited on insertion depth in the ear canal, and added a requirement that all over-the-counter hearing aids have user-adjustable volume control. The devices also must meet certain performance specifications and design requirements.
Eargo said its hearing aids are within the FDA’s output and insertion depth limit requirements
“Based on the current regulatory classification of Eargo hearing aids as Class I or Class II exempt air conduction hearing aids, we believe Eargo will have 240 days after the date of publication in the Federal Register to achieve compliance with new or revised requirements, including labeling requirements,” the company said.
“If, however, any of our current devices require 510(k) clearance in order to come into compliance with the final rule, we would need to obtain clearance for such devices by the effective date of the final rule,” it added.
The San Jose-based business currently sells its hearing aids online without a screening from an audiologist. Users can customize them using an app and they range in price from $1,450 to $2,650, according to the company’s website.
Eargo’s stock price almost tripled since the FDA published its final rule on Tuesday, climbing to $3.13 at the close of trading on Wednesday. The shares were down 22% in early trading on Thursday.
Still, before the FDA ruling, the company’s stock had been in a free fall since Eargo lost one of its biggest customers and faced False Claims Act allegations last year, which culminated in a $34.37 million settlement with the Department of Justice in April.
Revenue has been hurt as a result. Eargo’s second-quarter sales fell 68% to $7.2 million from a year earlier. Currently, the company is only selling the device to cash-paying customers as it looks to regain coverage from the Federal Employee Health Benefits Program.
With the new hearing aid regulations, the company is poised to move into retail sales, and Best Buy, which announced it would sell over-the-counter hearing aids in more than 300 stores, listed the Eargo 6 as one of the products it will offer.