NEW YORK, April 15, 2024 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of all persons and entities who purchased or otherwise acquired QuidelOrtho Corporation (“QuidelOrtho” or the “Company”) (NASDAQ: QDEL) securities between February 18, 2022 and April 1, 2024, inclusive (the “Class Period”). The Complaint in the lawsuit seeks to recover damages for the Company’s investors under the federal securities laws.
The Complaint alleges that QuidelOrtho provides tests for the detection and diagnosis of various respiratory diseases and other medical conditions. The Complaint also alleges that the Company’s respiratory business has historically been tied to the sale of seasonal flu tests and more recently to COVID-19 detection tests. The Complaint further alleges that since the onset of the COVID-19 pandemic, the Company has generated a significant portion of its revenue through the sale of high-margin COVID-19 tests to government customers, healthcare providers (through its authorized distributors), and large retail pharmacy chains. In addition the Complaint alleges that QuidelOrtho manufactures respiratory tests under various brands, including QuickVue, Sofia, and Savanna.
The Complaint alleges that in December 2021, the Company announced that it had agreed to merge with Ortho Clinical Diagnostics Holdings plc (“Ortho”). The merger closed in May 2022, shortly after the start of the Class Period. Meanwhile, the Complaint alleges that COVID-19 was transitioning from pandemic to “endemic” status (i.e., COVID-19 infections no longer growing exponentially). The Complaint further alleges that despite COVID-19 transitioning into an endemic, Defendants assured investors that it was well positioned to maintain a stable high margin revenue stream from its respiratory business. The Complaint alleges that among other strategies, the Company aimed to launch its “next flagship product,” a new test called the Savanna Respiratory Viral Panel-4 (the “Savanna RVP4 Test,” which tests for COVID-19 along with other respiratory conditions) by utilizing Ortho’s commercial distribution network. The Complaint alleges that during the Class Period, the Savanna RVP4 Test was not approved by the U.S. Food and Drug Administration (the “FDA”) to be marketed or sold in the United States, so therefore, investors closely monitored the Company’s progress in getting the Savanna RVP4 Test approved.
The Complaint alleges throughout the Class Period, Defendants misled investors by making statements that were false and misleading when made because they knew or deliberately disregarded and failed to disclose the following adverse facts about QuidelOrtho’s business, operations, and prospects: (a) that QuidelOrtho sold more COVID-19 tests to its distributors and pharmacy chain customers than they could resell to healthcare providers and end customers; (b) that excess inventories of COVID-19 tests existed throughout the supply chain; (c) that, as a result of (a)-(b), QuidelOrtho’s distributors and pharmacy chain customers were poised to significantly reduce their COVID-19 test orders; (d) that undisclosed problems created a heightened risk that the Savanna RVP4 Test would experience a delayed commercial launch in the United States; and (e) that, as a result of (a)-(d), Defendants lacked a reasonable basis for their positive statements about QuidelOrtho’s business, financials, and growth trajectory.
The Complaint further alleges that the truth began to emerge on February 13, 2024, when QuidelOrtho reported underwhelming results for its fourth quarter ended December 31, 2023.
The Complaint also alleges, that among other things, the Company’s Adjusted Earnings Per Share was 46% below the midpoint of Wall Street analysts’ expectations. The Complaint further alleges that this miss was largely attributed to lower COVID-19 revenues during the quarter due to distributor destocking, and QuidelOrtho also lowered its annual endemic COVID-19 revenue forecast from the range of $200-$400 million to $200 million. The Complaint alleges that, on this news, the price of QuidelOrtho stock dropped $21.50, or more than 32 percent, to close at $45.27 on February 14, 2024.
The Complaint further alleges that, on April 2, 2024, QuidelOrtho announced that it had withdrawn its FDA 510(k) submission for approval to sell the Savanna RVP4 Test in the United States after recent data did not meet expectations. Last, the Complaint also alleges that on this news, the price of QuidelOrtho stock dropped $4.85, or more than 10 percent, to close at $42.15 on April 2, 2024.
Investors who purchased or otherwise acquired securities of QuidelOrtho should contact the Firm prior to the June 11, 2024 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
