Full Press Release Details
SAN FRANCISCO, Sept. 20, 2024 (GLOBE NEWSWIRE) -- Hagens Berman encourages Outset Medical (NASDAQ: OM) investors who suffered substantial losses to submit your losses now. The firm also encourages persons with knowledge who may assist the investigation to contact its attorneys.
On September 9, 2024, Morgan Stanley disclosed that it reduced its investment in Outset Medical shares by roughly 79%, from approximately 3.4 million shares held as of February 9, 2024 to approximately 708 thousand shares as of that date. Previously, on September 5, 2024, JPMorgan Chase & Co. disclosed that it reduced its investment in Outset by roughly 97%, from approximately 4.7 million shares held as of January 23, 2024 to approximately 135 thousand shares. These disinvestment disclosures follow investor concerns about the propriety of Outset Medical’s disclosures about its business prospects and operations, specifically those concerning its Tablo Hemodialysis System (“Tablo products”). The company received Section 510(k) clearance from the FDA on July 29, 2022 for the Tablo products “as indicated for use in patients with acute and/or chronic renal failure, with or without ultrafiltration, in an acute or chronic care facility” and “in the home.”
Class Period: Aug. 1, 2022 – Aug. 7, 2024
Lead Plaintiff Deadline: Oct. 28, 2024
Contact the Firm Now: OM@hbsslaw.com
Outset Medical, Inc. (OM) Securities Class Action:
Outset Medical is facing allegations of making false and misleading statements, as detailed in a recent complaint. The company is accused of misleading investors about several critical issues:
It was marketing its Tablo products for continuous renal replacement therapy, an indication not approved by the FDA.
It likely needed to submit an additional 510(k) application to the FDA for these products.
It faced a substantial risk of halting Tablo product sales pending FDA approval for additional indications.
It lacked the necessary sales team and processes to effectively ramp up Tablo sales.
Its revenue growth would be adversely impacted due to these issues.
The situation began to unravel on July 7, 2023, when Outset Medical announced it had received a warning letter from the FDA. The letter asserted that the company was promoting a Tablo product, the “TabloCart,” without proper authorization under the existing 510(k).
Subsequently, on August 2, 2023, Outset Medical disclosed it was pausing shipments of the TabloCart pending an additional 510(k) application and FDA clearance. This pause signaled to investors that the FDA warning and the cessation of TabloCart sales would negatively impact the company’s financial performance.
On October 12, 2023, Outset Medical reported disappointing Q3 2023 financial results and guidance, attributing the dampened growth to the FDA warning letter.
The trend continued on August 7, 2024, when the company released underwhelming Q2 2024 financial results and guidance. During this announcement, Outset Medical revealed plans to restructure its sales team and processes, acknowledging it would not meet previous sales forecasts for the TabloCart.
In the wake of Outset Medical’s July 7, 2023 disclosure, the price of company shares has cratered 94% -- from $20.46 that day to $1.07 on Aug. 8, 2024.
“We are looking into whether Outset Medical may have knowingly tried to skirt the 2022 510(k) FDA clearance and misled investors about the strategy and financial repercussions of getting caught,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Outset Medical and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »
If you’d like more information and answers to frequently asked questions about the Outset Medical case and our investigation, read more »
Whistleblowers: Persons with non-public information regarding Outset Medical should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email OM@hbsslaw.com.
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Reed Kathrein, 844-916-0895