Merit Medical Systems (MMSI) Plunges 10.31% on FDA Warning

Merit Medical Systems (MMSI) shares plummeted 10.31% today, marking the lowest level since August 2024, with an intraday decline of 10.54%.

The strategy of buying MMSI shares after they reached a recent low and holding for one week resulted in a 22.42% return, significantly underperforming the benchmark return of 58.03%. The strategy had a maximum drawdown of 0.00%, indicating it avoided losses, but with a Sharpe ratio of 0.34 and a volatility of 24.35%, it came with considerable risk and fluctuations.

On July 16, 2025, Merit Medical Systems (MMSI) experienced a 5.3% drop in the morning session following the disclosure of a regulatory filing. The filing revealed that the company had received a warning letter from the U.S. Food and Drug Administration (FDA) regarding quality control issues at one of its manufacturing facilities. The FDA's concerns centered around the company's failure to adequately address previous observations and implement corrective actions, which could potentially impact the safety and efficacy of its medical devices.

This regulatory setback has raised concerns among investors about the company's ability to maintain compliance with regulatory standards and its potential impact on future product approvals and sales. The warning letter comes at a time when Merit Medical Systems is expanding its product portfolio and increasing its market presence, making the regulatory issues particularly challenging for the company.

In response to the FDA's warning letter, Merit Medical Systems has stated that it is taking immediate steps to address the identified issues and is working closely with the FDA to resolve the matter. The company has emphasized its commitment to quality and patient safety, and has assured investors that it is taking the necessary actions to ensure compliance with regulatory requirements. However, the regulatory challenges and the potential impact on the company's operations and financial performance remain a concern for investors.