06:53 AM EDT, 10/23/2024 (MT Newswires) -- McDonald's (MCD) shares fell early Wednesday as US health authorities said they are investigating an E. coli outbreak in several states linked to the fast-food giant's Quarter Pounder burgers.

The Centers for Disease Control and Prevention, Food and Drug Administration and the Department of Agriculture's Food Safety and Inspection Service are probing the company's food ingredients after most people in the outbreak reported eating the Quarter Pounder hamburger before becoming ill.

Shares of McDonald's dropped about 7.5% in premarket activity.

The outbreak has resulted in 49 cases across 10 states, one death and 10 hospitalizations, the CDC said late Tuesday. E. coli are a bacteria commonly found in various places, including intestines of people and animals, and can make people sick with diarrhea and urinary tract infections, among other illnesses, according to the agency.

Investigators are trying to determine whether the slivered onions or beef patties in Quarter Pounder burgers are the likely source of contamination. Diced onions and other types of beef patties haven't been implicated in the outbreak, the FDA said.

The company is working with the investigators and has temporarily stopped using the two ingredients in several states, including Colorado, Kansas, Utah, Wyoming, Montana, Nebraska, Nevada, New Mexico, and Oklahoma, according to the authorities.

"The initial findings from the investigation indicate that a subset of illnesses may be linked to slivered onions used in the Quarter Pounder and sourced by a single supplier that serves three distribution centers," McDonald's chief supply chain officer, Cesar Pina, said in a statement.

The outbreak is expected to have a "relatively insulated impact" limited to McDonald's domestic operations, if not to the affected states, Wedbush Securities said in a Wednesday client note. "Unfortunately, we don't expect the full extent of infections to be relatively clear for another two weeks," analysts Nick Setyan and Matt Quigley wrote in the note.

The brokerage also believes that McDonald's has the "scale and expertise" to respond and contain the negative implications of the outbreak "far more quickly" than burrito chain Chipotle Mexican Grill (CMG) did in 2015.

In 2020, Chipotle Mexican Grill agreed to pay $25 million to resolve criminal charges over foodborne illness outbreaks that sickened more than 1,100 people between 2015 and 2018.

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