UPDATE 1-Stryker to raise spending on quality, compliance

(Adds analyst comment)

By Debra Sherman

CHICAGO, May 8 (Reuters) - Stryker Corp (SYK.N: Quote, Profile, Research) said on Thursday it plans to spend $50 million in 2008 to improve its quality and compliance as it works to resolve issues with federal health regulators.

The Kalamazoo, Michigan, orthopedic device maker, which posted $6 billion in revenue for 2007, has been cited by the U.S. Food and Drug Administration over manufacturing problems linked to malfunctioning hip components.

More recently, the company's biotechnology unit received a warning letter from the FDA regarding quality and compliance issues at its Hopkinton, Massachusetts, location.

"I feel better today than I did 90 days ago," Stryker President and Chief Executive Stephen MacMillan said at the company's annual analyst meeting, which was webcast. "I will tell you (inspections) have gone very well ... We're very encouraged."

He noted that regulatory standards have become more rigorous in recent years and the bar has been raised industrywide.

"That's just the world we are in. We can whine about it or we can step up," MacMillan said.

Investments in quality and compliance will likely continue over the next three years, though not necessarily at the same level.