Wells Fargo has reportedly downgraded Medtronic’s (NYSE:MDT) stock after the company received an FDA warning letter.
Yesterday, the company confirmed that it received an FDA warning letter after an inspection of its Diabetes Business, with the regulatory body reporting inadequacy of specific medical device quality system requirements at the Northridge, California, facility. The warning letter mentioned the areas of risk assessment, corrective and preventive action, complaint handling, device recalls and the reporting of adverse events/
Shares of MDT closed yesterday down 6% in total at $104.94 per share on the back of the news around the FDA warning letter. The stock continued to fall today — down more then 3% to $101.28 apiece by afternoon trading.
SeekingAlpha reported today that Wells Fargo had upgraded Medtronic to “Overweight” in June after determining that growth would pick up on the back of the company’s pipeline, but today downgraded the stock to “Equal Weight” following setbacks within that pipeline, including the Diabetes Business news.
According to the report, analysts pointed out the next-generation MiniMed 780G insulin pump and Linq 2 cardiac monitoring system as part of the issues in the pipeline, as well as ongoing delays in the clinical study of its renal denervation system.