Outset Medical (OM) Faces Investor Scrutiny After FDA Warning Letter Leads to Poor Financial Results - Hagens Berman

/EIN News/ -- SAN FRANCISCO, Aug. 31, 2024 (GLOBE NEWSWIRE) -- Hagens Berman Outset Medical (NASDAQ: OM) investors who suffered substantial losses to submit your losses now. The firm also encourages persons with knowledge who may assist the investigation to contact its attorneys.

Class Period: Aug. 1, 2022 – Aug. 7, 2024
Lead Plaintiff Deadline: Oct. 28, 2024
Visit: www.hbsslaw.com/investor-fraud/om
Contact the Firm Now: OM@hbsslaw.com
844-916-0895

Outset Medical, Inc. (OM) Securities Class Action:

The litigation focuses on the propriety of Outset Medical’s disclosures about its business prospects and operations, specifically those concerning its Tablo Hemodialysis System (“Tablo products”). The company received Section 510(k) clearance from the FDA on July 29, 2022 for the Tablo products “as indicated for use in patients with acute and/or chronic renal failure, with or without ultrafiltration, in an acute or chronic care facility” and “in the home.”

The complaint alleges that Outset Medical made false and misleading statements and failed to disclose that: (1) the Tablo products were marketed for continuous renal replacement therapy, which is not one of the indications approved by the FDA; (2) as a result, it was reasonably likely to submit an additional 510(k) application to the FDA for the Tablo products; (3) there was a substantial risk that it would cease sales of the Tablo products pending FDA approval for additional indications; (4) it lacked the sales team and process to execute on the ramping of Tablo sales; and (5) as a result of the foregoing, its revenue growth would be adversely impacted.

Investors began to learn the truth on July 7, 2023, when Outset Medical revealed it received a warning letter from the FDA asserting that the company was promoting a Tablo product (the “TabloCart”) that was not authorized for use under the existing 510(k).

Then, on August 2, 2023, the company disclosed that it was pausing shipments of the TabloCart pending an additional 510(k) application and FDA clearance.

Next, investors learned that the FDA warning and cessation of TabloCart sales would negatively affect Outset Medical’s financial performance. On October 12, 2023, the company announced disappointing Q3 2023 financial results and guidance that indicated dampening growth attributable to the FDA warning letter.

Later, on August 7, 2024 the company released disappointing Q2 2024 financial results and guidance, while revealing the need to take “clear steps to improve our execution” including “sales team and process restructuring[]” and that it would not meet previous sales forecasts for TabloCart sales.

All of these events drove the price of Outset Medical shares sharply lower.

“We are looking into whether Outset Medical may have knowingly tried to skirt the 2022 510(k) FDA clearance and misled investors about the strategy and financial repercussions of getting caught,” said Reed Kathrein, the Hagens Berman partner leading the investigation.

If you invested in Outset Medical and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »

If you’d like more information and answers to frequently asked questions about the Outset Medical case and our investigation, read more »

Whistleblowers: Persons with non-public information regarding Outset Medical should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email OM@hbsslaw.com.

About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

Contact:
Reed Kathrein, 844-916-0895