MiniMed Shares Plunge 27% on Analyst’s Warning

Shares of MiniMed Inc., a maker of insulin pumps for diabetics, fell 27% on Monday after a medical technologies analyst said delayed government approval of two new company products could crimp projected sales growth.

The Sylmar-based company’s stock plunged $35.75 to close at $96.50 on Nasdaq trading of 2.59 million shares, more than eight times its three-month daily average, after the release of reports by an analyst attending the American Diabetes Assn.’s annual meeting in San Antonio.

MiniMed needs to conduct a seven-month clinical trial of its pre-filled insulin cartridges before it can win Food and Drug Administration approval, which could come as late as 2002, said Kevin Kotler of ING Barings in a research report issued Friday. He also said FDA approval of a MiniMed consumer glucose sensor device was expected for the second quarter of 2002, a quarter later than the company’s previous forecast.

Neither the FDA nor MiniMed officials could be reached for comment.

In a second report Monday, Kotler said the delays could reduce expected sales of the glucose sensor, previously estimated at $35 million for 2001. He had no revenue forecast for the insulin cartridges.

MiniMed also makes diabetes-related insulin pumps and glucose monitors for doctors.

MiniMed had 1999 net income of $21.9 million on revenue of $212.3 million, up $13 million on revenue of $138.6 million the year before.

Prudential Vector Healthcare Group analyst Sandra Hollenhorst, who rates MiniMed a “strong buy,” said earnings wouldn’t be affected by Monday’s stock movement. The company doesn’t expect a delay in the glucose sensor, she said, although the FDA did ask for more patient testing of the insulin cartridge.

Founded by former military physicist Alfred E. Mann, MiniMed began selling external insulin infusion pumps to diabetics in 1983.