OM) SHAREHOLDER CLASS ACTION ALERT: Bernstein Liebhard LLP announces that a securities class action lawsuit has been filed against Outset Medical, Inc. (NASDAQ: OM)
Have you lost money on your investments in Outset Medical? If yes, please visit Outset Medical, Inc. Shareholder Class Action or contact Pierre Allocco at (212) 951-2030 Where [email protected] to discuss your rights.
NEW YORK, July 11, 2022 /PRNewswire/ — Bernstein Liebhard LLP announces that a securities class action lawsuit has been filed on behalf of investors who purchased or acquired the common stock of Outset Medical, Inc. (“Outset Medical” or the “Company”) (NASDAQ: OM) enters September 15, 2020and June 13, 2022, inclusive (the “Class Period”). The lawsuit was filed in United States District Court for the Northern District of California and alleges violations of the Securities Exchange Act of 1934.
Outset Medical is a medical technology company specializing in kidney dialysis, the primary treatment for acute and chronic kidney failure. The Company’s flagship product is the Tablo hemodialysis system (“Tablo”). Tablo is a dialysis machine that purifies tap water, then purifies and artificially removes toxins from the blood of kidney failure patients.
Throughout the Class Period, Outset Medical boasted that Tablo could “serve as a dialysis clinic on wheels” and had been “licensed by the [U.S.] Food and drug administration [(the “FDA”)] for use in the hospital, clinic or at home.” Outset Medical said it was “well positioned” to “help accelerate[e] switch to home hemodialysis therapy “driven by the COVID-19 pandemic, patient preferences, government initiatives and reimbursement changes.
However, devices like Tablo that are used by non-professionals outside of a clinical setting and which may have serious health consequences are subject to extensive review by the FDA, including surveillance studies. post-marketing. So while cleared by the FDA for sale, Tablo has undergone additional studies for home use, the results of which may require additional clearance and approval applications.
In conducting other regulatory studies during the Class Period, the company assured investors that it was conducting the studies “in accordance with FDA-approved protocol,” which required proper demonstration of human testing. “real” given that the device would be used at home by non-professionals.
Undisclosed to investors, and as defendants have now admitted, Outset Medical has “continually” made significant changes to Tablo for home use. The nature of these undisclosed changes: (1) made it likely that the FDA would order the company to cease all marketing and sales of Tablo for home use pending additional applications and approvals; and (2) prevented the Company from performing the required “real life” human testing on a device authorized for sale, contrary to statements made to investors.
Investors began to learn the truth after markets closed on May 4, 2022when the Company announced disappointing results for the first quarter of 2022, which analysts attributed, among others, to the untested nature of Tablo in the home setting. In response to this disclosure, and as the market digested this news, Outset Medical’s common stock price fell more than 40% over the next three trading days, from a stock price of closing of $39.94 per share on May 4, 2022at a closing price of $23.06 per share on May 9, 2022.
Then, after the markets close on June 13, 2022, Outset Medical announced that the FDA has forced the company to hold all shipments of Tablo for home use until Tablo receives appropriate regulatory clearance. During an “FDA Review Call” organized that day with analysts, the company’s managing director Leslie Trigg acknowledged that the “ship’s hold” had already been in place for weeks before investors received this important information. Trigg also revealed for the first time that, rather than conducting studies using “real world data” collected in the “home environment”, as the company had previously stated as required by the FDA, Outset Medical had “operated with a protocol that involves a simulated use environment in a human factors lab.” During the same call, it was also announced that the company was “suspending our prior full-year and long-term guidance.”
On this news, the Company’s share price fell more than 34%, to close at $13.46 per share on June 14, 2022.
If you wish to act as the main plaintiff, you must apply to the court no later than September 6, 2022. A lead plaintiff is a representative party acting on behalf of the other class members to direct the litigation. Your ability to participate in any collection does not require you to serve as the lead plaintiff. If you choose to do nothing, you can remain an absent member of the group.
If you have purchased shares of Outset Medical common stock and/or wish to discuss your legal rights and options please visit Outset Medical, Inc. Shareholder Class Action or contact Pierre Allocco at (212) 951-2030 or [email protected].
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its customers. In addition to representing individual investors, the firm has been retained by some of the nation’s largest public and private pension funds to oversee their assets and bring lawsuits on their behalf. As a result of its success in hundreds of lawsuits and class actions, the firm has been named to the National Law Journal’s “List of Plaintiffs” thirteen times and listed in The Legal 500 for ten consecutive years.
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