It hasn't been a great day for the Medical Developments International Ltd (ASX: MVP) share price.
In late morning trade the healthcare company's shares are down a sizeable 14.5% to $5.00.
Why are Medical Developments International shares plunging lower today?
The Medical Developments International share price has taken a hit after the company provided an update on its United States operation.
According to the release, management met with the U.S. Food and Drug Administration (FDA) overnight and was dealt a blow in relation to getting its Penthrox "green whistle" pain management product approved for sale.
The administration informed the company that the clinical program for Penthrox is to be put on hold pending a letter outlining outstanding issues and concerns. Unfortunately, this letter could take upwards of two months to be received.
CEO John Sharman was clearly disappointed. He has stated that:
"This setback in our timetable to have Penthrox approved for sale in the US is very disappointing. We must now wait and see what the FDA require us to do, in addition to the work we have already done."
The company intends to update the market when further information is made available.
Should you buy the dip?
While I think that Medical Developments International is a quality healthcare company and that its Penthrox product has a bright future ahead of it, it might be prudent to wait for the FDA's letter before deciding whether to invest.
There is still a huge opportunity for the product outside the United States, but I do think it could be worth hearing the FDA's concerns first. Just in case its concerns influence regulators or potential buyers in other markets.
In the meantime, I think that fellow healthcare sector shares CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH) would be great buy and hold options for investors even after their stellar gains this year.
