Updated from 3:06 p.m. EDT

Shares of Merit Medical Systems ( MMSI) were among the worst-performing health and pharmaceutical stocks Wednesday, falling 15% after the company warned that third-quarter earnings and sales would fall below Wall Street expectations.

The maker of disposable medical products expects earnings of 14 cents to 15 cents a share on sales of $35 million to $36 million. Analysts polled by Thomson First Call had been expecting earnings of 19 cents a share on sales of $39.1 million. The company said the shortfall in earnings and sales was caused by reduced demand for its products during the quarter, which it attributed to an increase in competition, fewer procedures being conducted using its products, and -- to a lesser extent -- weather-related disturbances in the southeastern United States. Shares traded down $2.14 to $12.05.

Cell Genesys ( CEGE) fell 12.8% after the biotechnology company released preliminary third-quarter results and said it would sell $100 million in convertible notes. The company expects to post a third-quarter loss of 52 cents a share on sales of $3.2 million. Analysts had been expecting a loss of 52 cents a share on sales of $3.25 million. As for the convertible debt offering, the company said it plans to use the proceeds to repay two outstanding loans totaling $95 million. The debt repayment will eliminate restrictions on the company's $60 million cash balance. Shares traded down $1.09 to $7.42.

Shares of aaiPharma ( AAII) rose 0.5% after the company announced its lenders waived compliance for certain covenants in the company's senior secured credit facility. The waiver covers the quarters ending Sept. 30 and Dec. 31, respectively, and is contingent upon the company meeting minimum EBITDA thresholds. Earlier this month, the company missed an interest payment of $10 million on its 11.5% senior subordinated notes due 2010. Shares traded up 1 cent to $1.95.

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