NEW YORK, June 24, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against QuidelOrtho Corporation (NASDAQ: QDEL) on behalf of long-term stockholders following a class action complaint that was filed against QuidelOrtho on April 12, 2024 with a Class Period from February 18, 2022 to April 1, 2024. Our investigation concerns whether the board of directors of QuidelOrtho have breached their fiduciary duties to the company.
QuidelOrtho provides tests for the detection and diagnosis of various respiratory diseases and other medical conditions. The Company’s respiratory business has historically been tied to the sale of seasonal flu tests and more recently to COVID-19 detection tests. 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. QuidelOrtho manufactures respiratory tests under various brands, including QuickVue, Sofia, and Savanna.
In December 2022, 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, COVID-19 was transitioning from pandemic to “endemic” status (i.e., COVID-19 infections no longer growing exponentially). 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. 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. 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. Therefore, investors closely monitored the Company’s progress in getting the Savanna RVP4 Test approved.
According to the filed complaint, 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 filed 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. Among other things, the Company’s Adjusted Earnings Per Share was 46% below the midpoint of Wall Street analysts’ expectations. This miss was largely attributed to lower COVID-19 revenues during the quarter due to distributor destocking. QuidelOrtho also lowered its annual endemic COVID-19 revenue forecast from the range of $200-$400 million to $200 million.
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.
Then, 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.
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.
If you are a long-term stockholder of QuidelOrtho, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, by telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
