MENU

Medical Developments International Ltd (ASX:MVP) shares plunge lower on FDA news

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.

Or maybe this ASX healthcare small cap share which is up 285% with no sign of stopping...

One Australian company has developed a state of the art device that's revolutionizing hospitals all over the world. Even better, this device is so profitable that the company rakes in 90% margins. That's a lot of cash. So no wonder the stock's up 285% since 2008 – with no signs of stopping...

To discover the name and code, simply click the link below. You'll discover our expert's #1 medical technology pick... and you can decide for yourself whether to get invested today.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Cochlear Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.