Shares of medical device maker Medtronic slid more than 6% in Wednesday's trading session after the company disclosed a warning letter sent by the Food and Drug Administration addressing its diabetes business.
According to the company, the letter focuses on "the inadequacy of specific medical device quality system requirements" at its Northridge, California facility, covering areas including risk assessment, corrective and preventive action, complaint handling, device recalls and reporting of adverse events.
Medtronic emphasized that it is "expeditiously addressing the concerns raised in the warning letter" and working with the FDA to ensure its actions are "comprehensive and effective."
"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," Sean Salmon, president of Medtronics' diabetes business, said in a statement. "Every day millions of people living with diabetes around the world rely on the innovations we deliver, and Medtronic remains deeply committed to ensuring their safety and well-being."
The company noted in an 8-K filing on Wednesday that it does not expect its total organic revenue growth or its adjusted earnings per share guidance for the third quarter or full fiscal year 2022 to be impacted.
However, given the potential impact on the diabetes unit's business drivers, including uncertainty around timing of its U.S. product approvals, Medtronic is now expecting organic revenue growth declines in the high-single digit range for the third quarter and the mid-single digits range for the full fiscal year 2022, down modestly from previous guidance of mid- and low-single digit declines, respectively.
"At this time, depending on a range of potential scenarios, the Company has modeled preliminary impact to total company fiscal year 2023 revenue growth in the range of less than 0.5 percentage points to approximately 1 percentage point of growth, and intends to give full fiscal year 2023 guidance on its fiscal fourth quarter earnings call in May 2022," Medtronic added.
The FDA's letter follows an inspection that concluded in July related to recalls of its MiniMed 600 series insulin infusion pump and a remote controller device for its MiniMed 508 and Paradigm pumps. An FDA spokesperson did not immediately return FOX Business request for comment.