Trinity Biotech (TRIB) Stock: Here’s Why It’s Taking A Dive

Trinity Biotech plc (ADR) (NASDAQ: TRIB)

Trinity Biotech is having an incredibly rough day in the market today, and for good reason. The company made an early morning announcement that it has withdrawn a device application submitted to the FDA. Today, we’ll talk about the withdrawn application, how the stock reacted to the news, and what we can expect to see from TRIB ahead. So, let’s get right to it…

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TRIB Announces Withdrawn Application

As mentioned above, Trinity Biotech is having a rough day in the market today after withdrawing an application previously submitted to the FDA. The application is a device application which surrounds the company’s Meritas Troponin-I Test as well as Meritas Point-of-Care Analyzer. Following a recommendation from the United States Food and Drug Administration, the application has been withdrawn.

The news surrounding TRIB didn’t quite come out of the blue. The truth is that the FDA has been concerned about the device. Particularly, the concerns revolve around the device’s operating temperature range. There have also been concerns surrounding inconsistencies between the Troponin-I clinical performance and the clinical performance data presented by the most recently cleared laboratory device.

Restructuring Plans

As we know, TRIB had quite a bit of time, money, and other resources wrapped up in this project. So, the fact that the application has been withdrawn comes with some financial implications for the company. According to the announcement from Trinity Biotech, the company will be cutting spending to $1.5 million per year. That’s a big cut from the current $9 million per year budget. On top of that, the company will be closing a facility in Sweden, which will result in 40 layoffs.

What We Saw From The Stock As A Result

As investors, one of the first things that we learn is that the news moves the market. Any time positive news is released with regard to a publicly-traded company, we can expect to see gains in the value of the stock as a result. Adversely, any negative news will generally lead to declines. In this particular case, the news that was released was overwhelmingly negative. As a result, we’re seeing massive declines in the value of the stock today. Currently (1:27), the stock is trading at $6.39 per share after a loss of $6.60 per share (50.84%) thus far today.

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What We Can Expect To See Moving Forward

While I would love to say that I have a bullish opinion of what we can expect to see from TRIB moving forward, that’s simply not the case. The truth is that the company has a tough road ahead. We know that they plan to spend the next 9 to 12 months figuring out the best strategic path for the technology ahead, but that doesn’t give us much to go on in a positive way. All in all, while we may see a recovery at some point down the line, I don’t think that it’s going to happen any time soon.

[Image Courtesy of Wikipedia]

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