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Medtronic’s Shares Drop After Diabetes Unit Gets Warning Letter

Kristoffer Tripplaar / Alamy Stock Photo IMG_Dec152021at15857PM.jpg
The Dublin-based company’s diabetes business has suffered a bit in the past but a new product on the horizon could turn things around.

Medtronic’s Diabetes business is in hot water with FDA and the company’s shares have suffered a bit because of it.

Medtronic (MDT) shares dropped 6.22% during midday trade, a few hours after the company revealed it received a warning letter from FDA for its Northridge, CA facility.

The Dublin-based company said the warning letter was issued December 9, following an inspection that concluded in July related to recalls of the MiniMed 600 series insulin infusion pump, and a remote controller device for MiniMed 508 and Paradigm pumps.

The warning letter focuses on the inadequacy of specific medical device quality system requirements at the Northridge facility in the areas of risk assessment, corrective and preventive action, complaint handling, device recalls, and reporting of adverse events.

"We are committed to fully resolving all observations as effectively and quickly as possible. Nothing is more important to us than providing the highest quality products to people living with diabetes," said Sean Salmon, executive vice president and president of the Diabetes business at Medtronic.

Medtronic has struggled a bit with its diabetes unit. In November, Geoffrey Martha, Medtronic’s chairman and CEO spelled out the company’s position in the diabetes space and pointed out to some game-changing products on the horizon.

“In Diabetes, while we lost share again this quarter, we remain pleased with the momentum we're building outside the U.S., not only with the 780G insulin pumps but also with the positive customer feedback we've heard on our extended infusion set and fingerstick-free Guardian Sensor 4,” Martha said, according to a Seeking Alpha transcript. “And we expect our U.S. results to turn around as we launch these new products.”

According to a Seeking Alpha transcript of the call, Martha said, “In Diabetes, our MiniMed 780G insulin pump, combined with our Guardian 4 sensor continue to be under active review with FDA. When approved and launched in the U.S., we expect the 780G system to drive growth as it will be highly differentiated and further address the burden of daily diabetes management, and for the first time ever is helping hard to manage pediatric and adolescent patients achieve outcomes mirroring well-controlled adults."

 

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