Meridian Bioscience Inc. is laying off workers, ending production of 30 products and preparing for recalls that could cost hundreds of thousands of dollars after a recent plant inspection by the U.S. Food and Drug Admin istration (FDA).

        The Newtown-based medical test kit maker, formerly known as Meridian Diagnostics, said in a recent financial report that the measures will result in estimated losses of $9 million in sales and $2.5 million in operating income this year.

        Meridian's shares plummeted more than 40 percent Monday to $2.91, down $2.09.

        Repeated calls to Meridian's president's and chief executive's offices were not returned Monday afternoon. A secretary said both men were in meetings.

        In the financial report, issued Friday, Meridian said it was implementing the layoffs and other measures voluntarily in response to FDA “observations” regarding the company's quality control systems, including validation procedures and design control.

        The company said it has submitted a comprehensive plan to the FDA, outlining specific steps to improve its quality systems and is in the process of executing the plan.

        Meridian said it was unable to estimate the cost of the plan, but that it would be significant and would be reflected in operating results for the next 12 to 18 months.

        “For a company to take several steps back and take a look at their actual product offerings in response to the FDA's review is somewhat unusual,” Matt Desmond, who follows Meridian for Red Chip Review, said. “This will definitely be damaging, at least in the short term.”

        Meridian said it took an $8.5 million after-tax charge in the first quarter to comply with FDA regulations.

        The charge, combined with restructuring costs in Europe, led the company to report a net loss of $8.2 million, or 56 cents a share, in the first quarter.

        The restructuring costs were related to the company's transfer of its European export business to Belgium from Germany.

        Net sales in the first quarter rose to $15.3 million, from $14.3 million a year ago.

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