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LOS ANGELES, Oct. 23, 2024 (GLOBE NEWSWIRE) -- The Portnoy Law Firm advises Outset Medical, Inc. ("Outset" or the "Company") (NASDAQ:OM) investors of a class action representing investors that bought securities between Aug. 1, 2022 and Aug. 7, 2024, inclusive (the "Class Period"). Outset investors have until Oct. 28, 2024 to file a lead plaintiff motion.
Investors are encouraged to contact attorney Lesley F. Portnoy, by phone 310-692-8883 or email: lesley@portnoylaw.com, to discuss their legal rights, or click here to join the case. The Portnoy Law Firm can provide a complimentary case evaluation and discuss investors’ options for pursuing claims to recover their losses.
The lawsuit centers on whether Outset Medical properly disclosed information about its business prospects and operations, particularly related to its Tablo Hemodialysis System (“Tablo products”). On July 29, 2022, the company received FDA Section 510(k) clearance for Tablo products, which were approved for use in patients with acute or chronic renal failure, both in clinical settings and at home.
The complaint accuses Outset Medical of making false or misleading statements and failing to reveal that: (1) the Tablo products were marketed for continuous renal replacement therapy, an indication not approved by the FDA; (2) this marketing strategy likely meant the company would need to submit a new 510(k) application to the FDA; (3) there was a significant risk that sales of Tablo products would be halted until additional FDA approval was obtained; (4) the company lacked the necessary sales infrastructure to support increasing Tablo sales; and (5) these issues would negatively impact revenue growth.
Investors began to uncover the truth on July 7, 2023, when Outset Medical disclosed it had received an FDA warning letter stating the company was promoting the TabloCart, a product not authorized under the existing 510(k) clearance.
On August 2, 2023, the company announced it was suspending shipments of the TabloCart while waiting for additional FDA clearance through a new 510(k) application.
Further, investors learned that the FDA warning and the halt in TabloCart sales would harm Outset Medical’s financial performance. On October 12, 2023, the company reported disappointing Q3 2023 financial results and provided guidance indicating slowed growth due to the FDA warning.
Subsequently, on August 7, 2024, the company released disappointing Q2 2024 financial results and revised guidance, highlighting the need for “clear steps to improve execution,” including restructuring the sales team and process, and admitting it would not meet earlier sales forecasts for TabloCart.
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The Portnoy Law Firm represents investors in pursuing claims against caused by corporate wrongdoing. The Firm’s founding partner has recovered over $5.5 billion for aggrieved investors. Attorney advertising. Prior results do not guarantee similar outcomes.
Lesley F. Portnoy, Esq.
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