Outset Medical, Inc.
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who acquired Outset Medical, Inc. (“Outset”) (NASDAQ: OM) common stock from September 15, 2020 through June 13, 2022, both dates inclusive (the “Class Period”). Investors have until September 6, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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”). Tablo is a dialysis machine that purifies tap water and then artificially purifies and removes toxins from the blood of patients suffering from kidney failure.
On May 5, 2022, 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. On this news, the price of Outset Medical common stock declined by $7.39 per share, or approximately 18.50%, from $39.94 per share to close at $32.55 per share on May 5, 2022.
On June 13, 2022, Outset Medical announced that the Food and Drug Administration (“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 declined by $6.95 per share, or approximately 34.05%, from $20.41 per share to close at $13.46 per share on June 14, 2022.
The lawsuit alleges throughout the Class Period, Defendants made false and/or misleading statements 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.