Tuesday turned out to be a nightmare for shareholders of Trinity Biotech plc (ADR)(NASDAQ:TRIB), after the company announced that it is withdrawing its 510(k) premarket notification submission for the Meritas Troponin-I Test and Meritas Point-of-Care Analyzer
Trinity Biotech shares reacted to the news, crashing nearly 50% on Tuesday session.
The company held a meeting with the FDA on Thursday 29 September, 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 they have about the submission. Their primary concerns relate to 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.
“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,” the company stated.
“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 annualised 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 recognise a noncash write-off in excess of $50m, representing the costs incurred on the project, which will be recognised in our Q4 income statement.” (Original Source)
On the ratings front, Roth Capital analyst Chris Lewis maintained a Buy rating on TRIB, with a price target of $14, in a report issued on July 22. The current price target implies an upside of 8% from current levels. According to TipRanks.com, Lewis has a yearly average return of 5.7%, a 57% success rate, and is ranked #532 out of 4197 analysts.
Trinity Biotech Plc develops, manufactures and markets diagnostic test kits for the clinical laboratory. Its products are used to detect autoimmune, infectious and sexually transmitted diseases, autoimmune disorders, cardiac arrest, haemoglobin disorders, diabetes and disorders of the liver and intestine.