Medtronic received an alert from the U.S. regulator on Wednesday warning of concerns over its quality control of medical devices that are related to diabetes.
Medtronic shares dropped 6 percent to $104.95 in the early trading session, their lowest point in more than a decade.
The FDA letter focused on deficiencies in areas such as risk assessment, complaint handling and recalls of Medtronic’s Northridge, California facility.
It stated that the company is quick to respond to FDA’s concerns and is reviewing its actions with the agency.
Medtronic stated in a filing that it is not expecting any negative impact on its 2022 full-year adjusted profits outlook.
However, for the diabetes unit, it is forecasting a decrease in organic revenue, citing the uncertainty regarding the timing of U.S. product approvals, as well as other factors. For the unit, it is expecting a decline in the high-single digit range for the third quarter and mid-single digits for fiscal 2022. This is in contrast to previous guidance of mid- and low-single declining digits, respectively.
“The hit to financials isn’t too bad, but worse is likely the hit to investor sentiment,” said J.P. Morgan analyst Robbie Marcus, adding that Medrontic’s diabetes division was already trailing behind its rivals and the warning letter is likely to further exacerbate the issue.
Medtronic said that the letter, received earlier this month, was a result of an inspection in July that was related to recalls of MiniMed 600 insulin infusion pumps and remote controllers for other pumps.
In the year 2019 the manufacturer of medical devices MiniMed 600 pumps were recalled by diabetes patients to replace the missing or damaged clear retainer rings that secure the cartridge into the pump.
The company then announced that it would replace all clear retention rings on pumps that have damaged seals with new seals.
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Cite this as: US Health Regulator Flags Concerns Medtronic’s Diabetes Business Medscape Dec 16, 2021
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