Catheter-Linked Death Jolts Penumbra, a Target of Short Sellers

Penumbra Inc. assured the public last summer that it had addressed a problem associated with its specialized catheter that was linked to the deaths of more than a dozen stroke patients. Then came another fatality linked to the product.

The latest death associated with the Jet 7 Xtra Flex, a clot-removing catheter, was made public on Wednesday. It has fed an argument by some short sellers that the system -- approved by the U.S. Food and Drug Administration last year in an accelerated process -- has significant defects that will create legal liabilities for the company.

Shares of Penumbra declined ...