Law Offices of Howard G. Smith reminds investors of the upcoming October 28, 2024 deadline to file a lead plaintiff motion in the case filed on behalf of investors who purchased Outset Medical, Inc. (“Outset Medical” or the “Company”) OM securities between August 1, 2022 and August 7, 2024, inclusive (the “Class Period”).
Investors suffering losses on their Outset Medical investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at (215) 638-4847 or by email to howardsmith@howardsmithlaw.com.
On July 7, 2023, after the market closed, Outset Medical disclosed that it had received a Warning Letter from the FDA which “asserted that certain materials . . . promote continuous renal replacement therapy (CRRT), a modality outside of the current indications for the Tablo Hemodialysis System” and “assert[ed] that the TabloCart with Prefiltration . . . requires prior 510(k) clearance for marketing authorization.” and that the Company would “work collaboratively with the FDA to resolve this observation, including potentially submitting a 510(k) on TabloCart.” On this news, Outset Medical’s stock price fell $1.20, or 5.9%, to close at $19.26 per share on July 10, 2023, on unusually heavy trading volume.
On August 2, 2023, after the market closed, the Company issued a press release which announced a “Shipment Pause of TabloCart with Prefiltration Pending 510(k) Clearance.” On this news, Outset Medical’s stock price fell $1.97, or 10.18%, to close at $17.39 per share on August 3, 2023, on unusually heavy trading volume.
On October 12, 2023, after the market closed, the Company revealed that revenue growth had been significantly impacted by the FDA’s warning letter. Specifically, the Company issued a press release announcing preliminary third quarter 2023 financial results, as well as updated financial guidance for 2023 revenue, which reflected that “[g]rowth in the quarter was dampened by a larger-than-expected impact in the field from the recent FDA warning letter.” On this news, the Company’s share price fell $3.38, or 49.9%, to close at $3.39 per share on October 13, 2023, on unusually heavy trading volume.
On August 7, 2024, after the market closed, Outset Medical released its second quarter 2024 financial results, significantly missing consensus estimates and lowering its full year 2024 revenue guidance by $39 million at the midpoint. The Company disclosed it would be forced to take “clear steps to improve our execution” including “sales team and process restructuring.” As a result, the Company disclosed it would be unable to deliver on a post-approval sales ramp of TabloCart previously forecast. On this news, the Company’s share price fell $2.33, or 68.53%, to close at $1.07 per share on August 8, 2024, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) the Tablo products were marketed for continuous renal replacement therapy, which is not one of the indications approved by the FDA; (2) that, as a result, Outset Medical was reasonably likely to submit an additional 510(k) application for the Tablo products; (3) that there was a substantial risk that the Company would cease sales of the Tablo products pending FDA approval of additional indications; (4) that Outset Medical lacked the sales team and process to execute on the ramp of Tablo sales; (5) that, as a result of the foregoing, the Company’s revenue growth would be adversely impacted; and (6) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased or otherwise acquired Outset Medical securities during the Class Period, you may move the Court no later than October 28, 2024 to ask the Court to appoint you as lead plaintiff if you meet certain legal requirements. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.
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