Trinity Biotech PLC (NASDAQ: TRIB) is watching its shares get halved on Tuesday after the company announced that it would withdraw one of its submissions to the U.S. Food and Drug Administration. Specifically, the company said that it is withdrawing its 510(k) pre-market notification submission for the Meritas Troponin-I Test and Meritas Point-of-Care Analyzer.
Essentially, the company held a meeting with the FDA last week, in order to obtain an update on the company’s Meritas Troponin submission. At this meeting the FDA asked Trinity to consider withdrawing their submission, due to some concerns the agency had about the submission.
The primary concerns were regarding the device’s operating temperature range and that the Troponin-I clinical performance is not consistent with the clinical performance data presented by the most recently cleared laboratory Troponin device.
Although Trinity Biotech believes that the Meritas product demonstrates excellent performance for a point-of-care product and is superior to all existing point-of-care Troponin products in the market, the company decided to withdraw the submission.
The decision to withdraw was based on the fact that the company believes 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.
Looking ahead, Trinity Biotech will be engaging with the FDA over the coming weeks in an attempt to understand and alleviate the agency’s concerns.
Excluding Tuesday’s move, Trinity Biotech had actually outperformed the broad markets with the stock up 10% year to date.
Shares of Trinity Biotech were last trading down about 50% at $6.45, with a consensus analyst price target of $17.50 and a 52-week trading range of $5.76 to $13.68 (oh, and that 52-week low was today as well). By losing 50% and having a $149 million market cap, that means that roughly $150 million in market value has been vaporized in an instant.
Last week there were 5 companies that destroyed their shareholders. As of now, you can bet that Trinity Biotech will make this week’s top destroyers of shareholders.
Trinity’s press release said:
Whilst we believe that the Meritas product demonstrates excellent performance for a point-of-care product and is superior to all existing point-of-care Troponin products in the market, we decided yesterday to withdraw the submission. Over the coming weeks we will engage with the FDA to gain a better understanding of the nature of their concerns. However, it is our understanding that in order for any new point-of-care Troponin product to obtain clearance, the FDA will require it to demonstrate performance equivalent to the most recently cleared laboratory based device. Our 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.
We will now embark upon an internal process to determine the best future opportunity for this technically excellent platform, concentrating on which products and markets we should focus on, including establishing the optimal strategic outcome for Troponin. This process is expected to take between 9 and 12 months. In the meantime we have decided to move the technology from our Swedish facility in Uppsala to our facility in Bray, Ireland where it will be incorporated into our existing R&D and manufacturing infrastructure. This will result in the closure of the Uppsala facility, which will result in approximately 40 redundancies.
Consequently expenditure levels, which are currently running at an annualized rate of over $9m, will be reduced to approximately $1.5m per annum. There will however, be Swedish redundancy and closure costs which are currently in the process of being determined. The company will also recognize a non-cash write-off in excess of $50m, representing the costs incurred on the project, which will be recognized in our Q4 income statement.