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FDA warns Abbott Labs
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September 29, 1999: 10:31 a.m. ET
Stock falls after diagnostic division advised of quality assurance violations
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NEW YORK (CNNfn) - Shares of Abbott Laboratories fell about 8 percent Wednesday on news that federal regulators may seek to stop production of test kits at the company's diagnostics division if quality assurance problems aren't corrected.
The medical products company, in a statement announcing the Food and Drug Administration notification late Tuesday, said it believes it is complying with regulations at its plant in Lake County, Ill. The company said it is in talks with government officials about a proposed consent decree.
If those discussions aren't successful, Abbott said, the FDA has advised the company that it will seek to halt manufacturing and sale of a number of Abbott's diagnostic products.
"The company would resist that suit," Abbott said.
Abbott (ABT) stock dropped 3-1/8 to 36-7/8, a 52-week low, in early trading Wednesday. Deutsche Banc Alex. Brown, saying the company is an industry leader but that the FDA news adds uncertainty, lowered its rating on the stock to a "buy" from a "strong buy," Reuters reported.
The plant, which produces chemical test kits for diseases including AIDS, heart attacks and colon cancer, produces about $1.5 billion worth of the kits annually, the Wall Street Journal reported Wednesday, citing unidentified industry officials.
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Abbott Laboratories
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