A recent storm is brewing for Outset Medical as the Law Offices of Howard G. Smith announces a class action lawsuit on behalf of investors who purchased Outset Medical, Inc. (“Outset Medical” or the “Company”) securities under the ticker symbol OM on the NASDAQ between August 1, 2022, and August 7, 2024, during what has now been termed the “Class Period.” Investors in Outset Medical have until October 28, 2024, to file a lead plaintiff motion.
The tempest began on July 7, 2023, when Outset Medical revealed that they had received a Warning Letter from the FDA regarding the promotion of continuous renal replacement therapy (CRRT) outside the FDA-approved indications for the Tablo Hemodialysis System. This news caused Outset Medical’s stock price to plummet by $1.20 or 5.9%.
The storm continued with further damaging news on August 2, 2023, when the Company announced a “Shipment Pause of TabloCart with Prefiltration Pending 510(k) Clearance,” resulting in a 10.18% drop in stock price.
On October 12, 2023, Outset Medical disclosed that revenue growth took a significant hit due to the FDA’s warning letter, causing shares to plummet by 49.9%.
The final blow hit on August 7, 2024, when Outset Medical reported bleak second-quarter financial results, missing estimates and slashing full-year revenue guidance by $39 million. The Company confessed it would need to implement extensive reorganization to enhance performance, leading to a startling 68.53% stock price decrease.
The lawsuit alleges that throughout the Class Period, Outset Medical and its executives made false statements and omitted critical information about the Company’s operations, deceiving investors. Key points undisclosed include misrepresentation of product marketing, the likelihood of additional FDA applications, risks of sales cessation, inadequate sales execution, and the detrimental impact on revenue growth. Investors who wish to learn more should contact the Law Offices of Howard G. Smith.
The thunder of this class action lawsuit serves as a stark reminder for investors to scrutinize disclosures and remain vigilant amidst turbulent market conditions.
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