OUTSET MEDICAL, INC. (NASDAQ: OM) SHAREHOLDER CLASS ACTION ALERT: Bernstein Liebhard LLP Announces that a Securities Class Action Lawsuit Has Been Filed Against Outset Medical, Inc. (NASDAQ: OM)
Did you lose money on investments in Outset Medical? If so, please visit Outset Medical, Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [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) between September 15, 2020, and June 13, 2022, inclusive (the "Class Period"). The lawsuit was filed in the 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 focused on 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 and then artificially purifies and removes toxins from the blood of patients suffering from kidney failure.
Throughout the Class Period, Outset Medical touted that Tablo can "serve as a dialysis clinic on wheels" and had been "cleared by the [U.S.] Food and Drug Administration [(the "FDA")] for use in the hospital, clinic or home setting." Outset Medical contended it was "well-positioned" to "help accelerate th[e] shift to home-based hemodialysis therapy" prompted 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 can present serious health consequences are subject to heightened scrutiny by the FDA, including post-market surveillance studies. Thus, though cleared by the FDA for sale, Tablo was subject to additional studies for use in the home setting, the results of which could require additional applications for clearance and approvals.
While performing further regulatory studies during the Class Period, the Company assured investors that it was conducting the studies "in accordance with the FDA approved protocol," which required an appropriate demonstration of "real-world" human testing given that the device would be used at home by non-professionals.
Undisclosed to investors, and as Defendants have now admitted, Outset Medical "continuously" made significant changes to Tablo for use in the home setting. The nature of these undisclosed changes: (1) made it likely that the FDA would order the Company to cease all marketing and selling of Tablo for use in the home pending additional applications and approvals; and (2) prevented the Company from performing the requisite "real-world" human testing on a device cleared for sale, contrary to representations to investors.
Investors began to learn the truth after the markets closed on May 4, 2022, when the Company announced disappointing results for the first quarter of 2022, which analysts attributed, inter alia, to the untested nature of Tablo in the home setting. In response to this disclosure, and as the market digested this news, the price of Outset Medical common stock declined more than 40% over the three trading days that followed, from a closing price of $39.94 per share on May 4, 2022, to a closing price of $23.06 per share on May 9, 2022.
Then, after the markets closed on June 13, 2022, Outset Medical announced that the FDA had forced the Company to hold all shipments of Tablo for use in the home until Tablo received proper regulatory clearance. During an "FDA Review Call" held that day with analysts, Company Chief Executive Officer Leslie Trigg acknowledged the "ship hold" had already been in place for weeks before investors were provided this material information. Trigg also disclosed for the first time that, rather than conducting studies using "real-world data" gathered in the "home environment", as the Company previously stated was required by the FDA, Outset Medical had "run with a protocol that involves a simulated use environment at a human factors lab." During the same call, it was also announced the Company was "suspending our prior full-year and long-term guidance."
On this news, the Company's stock price fell over 34%, to close at $13.46 per share on June 14, 2022.
If you wish to serve as lead plaintiff, you must move the Court no later than September 6, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery does not require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
If you purchased Outset Medical common stock, and/or would like to discuss your legal rights and options please visit Outset Medical, Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [email protected].
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal's "Plaintiffs' Hot List" thirteen times and listed in The Legal 500 for ten consecutive years.
ATTORNEY ADVERTISING. © 2022 Bernstein Liebhard LLP. The law firm responsible for this advertisement is Bernstein Liebhard LLP, 10 East 40th Street, New York, New York 10016, (212) 779-1414. Prior results do not guarantee or predict a similar outcome with respect to any future matter.
Contact Information:
Peter Allocco
Bernstein Liebhard LLP
https://www.bernlieb.com
(212) 951-2030
[email protected]
SOURCE Bernstein Liebhard LLP
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