BOCA RATON, Fla., July 20, 2022 (GLOBE NEWSWIRE) -- Saxena White P.A. issues this notice to update the docket number in the securities class action lawsuit filed against Outset Medical, Inc. and related defendants in the United States District Court for the Northern District of California. A prior press release issued by Saxena White P.A. on July 8, 2022, following the filing of its complaint, provided a docket number that was changed by the Court. The lawsuit has been assigned to the San Francisco Division of the U.S. District Court for the Northern District of California and its docket number has been changed to 3:22-cv-04016, from 5:22-cv-04016. A copy of the complaint with the updated docket number is available on Saxena White P.A.’s website, provided below. The full, updated release follows:
Saxena White P.A. has filed a securities fraud class action lawsuit (the “Class Action”) in the United States District Court for the Northern District of California against Outset Medical, Inc. (“Outset Medical” or the “Company”) (NASDAQ: OM) and certain of its executive officers (collectively, “Defendants”). The Class Action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder on behalf of all persons or entities that purchased Outset Medical common stock between September 15, 2020 and June 13, 2022, inclusive (the “Class Period”), and were damaged thereby (the “Class”). The Class Action filed by Saxena White is captioned: Plymouth County Retirement Association v. Outset Medical, Inc., No. 3:22-cv-04016 (N.D. Cal.).
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”), 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” that had been “cleared by the [U.S.] Food and Drug Administration [(the “FDA”)] for use in the hospital, clinic or home setting” under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (the “FDCA”). Devices used by non-professionals outside of a clinical setting and that can present serious health consequences like Tablo are subject to heightened scrutiny by the FDA, including post-market surveillance studies pursuant to the FDCA. 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.
The Class Action alleges that, during the Class Period, Defendants misled investors and/or failed to disclose that (1) Defendants had “continuously made improvements and updates to Tablo over time since its original clearance” that required an additional 510(k) application; (2) as a result, the Company could not conduct a human factors study on a cleared device in accordance with FDA protocols; (3) the Company’s inability to conduct the human factors study subjected the Company to the likelihood of the FDA imposing a “shipment hold” and marketing suspension, leaving the Company unable to sell Tablo for home use; and (4) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
The truth began to emerge on May 5, 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 Wednesday, May 4, 2022, to a closing price of $23.06 per share on Monday, 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, the Defendants acknowledged the “ship hold” had already been in place for weeks before investors were provided this material information, and that as a result of the shipment hold, the Company was “suspending our prior full-year and long-term guidance.” On this news, the price of Outset Medical stock fell an additional 33%, from a closing price of $20.41 per share on June 13, 2022, to a closing price of $13.46 per share on June 14, 2022.
If you purchased Outset Medical common stock during the Class Period and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as lead plaintiff. If you wish to apply to be lead plaintiff, a motion on your behalf must be filed with the U.S. District Court for the Northern District of California no later than September 6, 2022. The lead plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as lead plaintiff to share in any Class recovery in the Class Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member.
You may contact Wolfram T. Worms (wworms@saxenawhite.com), an attorney at Saxena White P.A., to discuss your rights regarding the appointment of lead plaintiff or your interest in the Class Action. You also may retain counsel of your choice to represent you in the Class Action.
You may obtain a copy of the Complaint and inquire about actively joining the Class Action at www.saxenawhite.com.
Saxena White P.A., with offices in Florida, New York, California, and Delaware, is a leading national law firm focused on prosecuting securities class actions and other complex litigation on behalf of injured investors. Currently serving as lead counsel in numerous securities fraud class actions nationwide, Saxena White has recovered billions of dollars on behalf of injured investors.
CONTACT INFORMATION
Wolfram T. Worms, Esq.
wworms@saxenawhite.com
Saxena White P.A.
12750 High Bluff Drive, Suite 475
San Diego, CA 92130
Tel: (858) 256-5298
Fax: (858) 369-0096
www.saxenawhite.com
