'Major setback' pummels Trinity Biotech shares
Shares in Irish medical technology firm Trinity Biotech slumped by over 50pc yesterday, slashing $150m from its market capitalisation in New York, after the US Food and Drug Administration (FDA) asked the company to withdraw an application for approval for a product aimed at detecting heart attacks.
Trinity Biotech said it's also writing off $50m that was related to the so-called Troponin I test, as a non-cash charge.
The company also withdrew an FDA application for a device used in conjunction with the test, the Meritas Point-of-Care Analyser.
The company will close its facility in Sweden where assays for the device were being developed, with the loss of about 40 jobs.
Ronan O'Caoimh, inset, the co-founder and chief executive of Trinity Biotech, described the withdrawal of the application as a "devastating blow".
"I am aware that this is absolutely devastating news," he told investors yesterday. "We are distressed at having to impart this news today."
But he also said that he expects the board to be "aggressive" in an ongoing share buyback given the huge decline in the share price. He said the firm will bring forward its results release this month to enable it to pursue the buyback.
Shares in the company, which is listed on New York's Nasdaq, plummeted after Trinity Biotech revealed the FDA news.
The company has a range of diagnostic products for the point-of-care and clinical laboratory markets.
It said that during a 30-minute telephone call with the FDA last week, the watchdog asked Trinity Biotech to consider withdrawing its submission for premarket approval of its Meritas Troponin-I test, and Meritas Point-of-Care analyser.
"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," said Trinity Biotech.
The FDA had a concern with the fact that the Trinity device data showed that it failed to detect 13pc of heart attacks. However, the company pointed out that a competing product already on the market has a much higher detection failure rate.
Trinity Biotech's chief scientific officer, Jim Walsh, said the FDA had not previously voiced any concerns about the operating temperature range of the devices and that it was "very much to our surprise" that the company was asked to withdraw its application.
Trinity Biotech said that given the likely changes that would be required to the product to meet the FDA's requirements, the company has decided not to pursue the launch of the products in the United States.
Mr O'Caoimh co-founded Trinity Biotech, which has its headquarters in Bray, Co Wicklow. He insisted yesterday that the withdrawal of the application for the heart attack test does not mean that the company's Meritas system "is a complete failure".
"Even though today has been hugely disappointing for us, Trinity Biotech is not entirely about Troponin," he said. "We have an excellent Meritas platform whose value we will seek to maximise. While this is a major setback, it would be a mistake to regard Meritas as a complete failure. The Meritas platfom is an important component in our armoury for the future."
He pointed out that the company's existing business has annual revenues of more than $100m, and "very strong product segments".