OM CLASS ACTION NOTICE: The Law Offices of Frank R. Cruz Files Securities Fraud Lawsuit Against Outset Medical, Inc.

Published 3 months ago via Business Wire

The Law Offices of Frank R. Cruz announces that it has filed a class action lawsuit in the United States District Court for the Northern District of California, captioned Porcelli v. Outset Medical, Inc., et al., Case No. 5:24-cv-06124, on behalf of persons and entities that purchased or otherwise acquired Outset Medical, Inc. (“Outset Medical” or the “Company”) (NASDAQ: OM) securities between August 1, 2022 and August 7, 2024, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).

Investors are hereby notified that they have until 60 days from this notice to move the Court to serve as lead plaintiff in this action.

If you are a shareholder who suffered a loss, click here to participate.

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.

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If you purchased Outset Medical securities during the Class Period, you may move the Court no later than 60 days from this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class 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. If you purchased Outset Medical securities, have information or 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 Frank R. Cruz, of The Law Offices of Frank R. Cruz, 2121 Avenue of the Stars, Suite 800, Los Angeles, California 90067 at 310-914-5007, by email to info@frankcruzlaw.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

OM CLASS ACTION NOTICE: The Law Offices of Frank R. Cruz Files Securities Fraud Lawsuit Against Outset Medical, Inc.

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