After reporting that it's withdrawing a FDA application for approval of its Meritas Point-of-Care Analyzer, shares in Trinity Biotech plc (NASDAQ:TRIB) are falling more than 51% at 1:30 p.m. EDT today.
The developer and manufacturer of diagnostic products for the point-of-care and clinical laboratory markets, today announced that it's pulling its application for approval of its Meritas Point-of-Care Analyzer and Troponin-I Test after a meeting with the FDA revealed regulator concerns about the filing.
Specifically, Trinity Biotech had filed for approval under the less-onerous 510(k) marketing application pathway in December; however, to qualify for that pathway, devices must be equivalent to previously approved devices. Unfortunately, the FDA questioned whether or not the performance data associated with the Troponin-1 test meets that standard, which resulted in the application withdrawal.
In response, Trinity Biotech's management says the "decision to withdraw is based on the fact that, notwithstanding its excellent performance characteristics, we believe that there is no certainty that this level of performance can be achieved by the Meritas product even with the benefit of further development efforts." Obviously, this casts significant doubt on how the company will proceed with this analyzer and test.
Management will conduct a review to determine how to move forward with the FDA, but that review could take between nine months and a year to complete.
During the review, Trinity Biotech will attempt to rein in expenses by shifting technology from its Sweden-based facility to Ireland and cutting 40 jobs. Management expects expenses to drop from an annualized rate of over $9 million to approximately $1.5 million per year because of these moves.
Last quarter, the company reported revenue of $26.3 million, up 8% from $24.3 million a year ago, and after-tax profit of $2.1 million, down from $2.7 million a year ago.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. Like this article? Follow him on Twitter where he goes by the handle @ebcapital to see more articles like this. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days.