Wednesday ended up being a pretty good day for many companies on the stock market -- but not for medical device mainstay Medtronic (MDT 1.22%). Its shares dived by 6% after it revealed that it had received a wagging-the-finger letter from a top regulator.
On Wednesday morning, Medtronic disclosed that it received a letter from the Food and Drug Administration (FDA) last week regarding its Northridge, California, facility. That plant is the headquarters of the company's diabetes business, and received an FDA inspection visit in July.
Medtronic said that the regulator expressed concern about "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."
That's quite a list of areas where there could be issues, and such language implies that problems at the facility are significant.
Medtronic says it will rectify the situation. In its press release on the matter, it wrote that "We are committed to fully resolving all observations as effectively and quickly as possible."
It added that it "will apply resources from across the company and utilize external experts. The company is implementing a range of corrective actions and process improvements related to the observations, and will continue reviewing these actions with the FDA."
Medtronic said that it isn't recommending that either its patients or the healthcare providers prescribing/advising the purchase of its diabetes solutions take any action now.
Some investors, though, took action by selling their stock. Shareholders hate to hear that a company might not have been as careful as it should have been about maintaining its facilities -- particularly when it comes to companies in the healthcare industry. Much will now depend on how quickly, effectively, and honestly Medtronic rectifies the situation.