Cases
Medtronic PLC
Securities Class Action
Overview
Overview
- Date:
- 11/7/2022
- Company Name:
- Medtronic PLC
- Stock Symbol:
- MDT
- Class Period:
- FROM 6/8/2019 TO 5/25/2022
- Status:
- Filed
- Court:
- U.S. District Court: Minnesota
Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against Medtronic PLC (“Medtronic” or the “Company”) (NYSE: MDT) in the United States District Court for the District of Minnesota on behalf of all persons and entities who purchased or otherwise acquired Medtronic securities between June 8, 2019 and May 25, 2022, both dates inclusive (the “Class Period”). Investors have until November 7, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Medtronic is a medical device company. Among its products is the MiniMed insulin pump system for the treatment of diabetes. The systems include the MiniMed 600 series models and the MiniMed 780G model. Medtronic is currently seeking regulatory approval for the MiniMed 780G model, which uses an advanced hybrid closed loop system. During the Class Period, Medtronic repeatedly assured investors that the MiniMed 780G model was “on track” for approval by the U.S. Food and Drug Administration (“FDA”) and would provide Medtronic with the edge it needed to close a growing gap with its competitors in the diabetes market.
Medtronic made these representations despite known issues with the MiniMed 600 series models. Indeed, in November 2019, the company issued a warning that certain MiniMed 600 series insulin pumps might have damaged pump retainer rings, which could cause the system to release too much insulin, and instructed customers with damaged rings to contact the company for replacements. On February 7, 2020, the FDA classified Medtronic’s November 2019 notification as a Class I recall—the most serious type of recall.
Problems with the MiniMed 600 series mushroomed in October 2021, when the company expanded its recall to all MiniMed model 630G and 670G insulin pump systems—whether or not any retainer ring damage was actually visible. Despite these serious issues with the 600 series, Medtronic assured investors that they expected the MiniMed 780G “to drive growth.” Consistent with these optimistic statements, Medtronic again assured investors that FDA approval of the MiniMed 780G was imminent.
Investors began to learn the truth about the company’s MiniMed operations on December 15, 2021, when Medtronic revealed that it had received a warning letter from the FDA regarding its Northridge, California facility (the “Warning Letter”). The Warning Letter followed an FDA inspection relating to the company’s MiniMed 600 series recall, and focused on “the inadequacy of specific medical device quality system requirements . . . in the areas of risk assessment, corrective and preventive action, complaint handling, device recalls, and reporting of adverse events.”
As a result of the Warning Letter—including the resulting uncertainty about FDA approval of the MiniMed 780G and other products in Medtronic’s diabetes operating unit, the Diabetes Group, Medtronic lowered its guidance for its Diabetes Group, now projecting that Diabetes Group product revenues would decline in the mid-single digit range for fiscal year 2022. On this news, the price of Medtronic common stock declined $6.75 per share, or approximately 6%, from a close of $111.69 per share on December 14, 2021, to close at $104.94 per share on December 15, 2021.
The financial fallout from the FDA’s findings continued to surface on May 26, 2022, when Medtronic reported its financial results for the fourth quarter and full fiscal year 2022, and provided guidance for fiscal year 2023. Notably, Medtronic disclosed that as a result of the company’s need to improve its quality control system and its expectation that the MiniMed 780G model—which Defendants had repeatedly identified as crucial to future growth—would not be approved in 2023, the company expected revenues from its Diabetes Group to decline between 6% and 7% in fiscal year 2023. On this news, the price of Medtronic common stock fell $6.10 per share, or nearly 6%, from a close of $105.54 per share on May 25, 2022, to close at $99.44 per share on May 26, 2022.
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 and operations by failing to disclose that: (1) Medtronic’s product quality control systems were inadequate; (2) Medtronic had failed to comply with numerous regulations regarding risk assessment, corrective and preventive action, complaint handling, device recalls, and reporting of adverse events; (3) these failures increased the risk of regulatory investigation and action; (4) as a result of the company’s misconduct, the FDA would delay the approval of additional Medtronic MiniMed devices, including the MiniMed 780G; (5) these delays in product approvals, as well as the company’s need to improve its quality control systems, would negatively affect Medtronic’s financial performance and cause it to fall further behind its competitors; and (6) as a result of the foregoing, Defendants’ statements about the company’s business, operations, and prospects lacked a reasonable basis.
If you purchased or otherwise acquired Medtronic shares and suffered a loss, are a long-term stockholder, 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 Melissa Fortunato by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out the form below. There is no cost or obligation to you.
Medtronic is a medical device company. Among its products is the MiniMed insulin pump system for the treatment of diabetes. The systems include the MiniMed 600 series models and the MiniMed 780G model. Medtronic is currently seeking regulatory approval for the MiniMed 780G model, which uses an advanced hybrid closed loop system. During the Class Period, Medtronic repeatedly assured investors that the MiniMed 780G model was “on track” for approval by the U.S. Food and Drug Administration (“FDA”) and would provide Medtronic with the edge it needed to close a growing gap with its competitors in the diabetes market.
Medtronic made these representations despite known issues with the MiniMed 600 series models. Indeed, in November 2019, the company issued a warning that certain MiniMed 600 series insulin pumps might have damaged pump retainer rings, which could cause the system to release too much insulin, and instructed customers with damaged rings to contact the company for replacements. On February 7, 2020, the FDA classified Medtronic’s November 2019 notification as a Class I recall—the most serious type of recall.
Problems with the MiniMed 600 series mushroomed in October 2021, when the company expanded its recall to all MiniMed model 630G and 670G insulin pump systems—whether or not any retainer ring damage was actually visible. Despite these serious issues with the 600 series, Medtronic assured investors that they expected the MiniMed 780G “to drive growth.” Consistent with these optimistic statements, Medtronic again assured investors that FDA approval of the MiniMed 780G was imminent.
Investors began to learn the truth about the company’s MiniMed operations on December 15, 2021, when Medtronic revealed that it had received a warning letter from the FDA regarding its Northridge, California facility (the “Warning Letter”). The Warning Letter followed an FDA inspection relating to the company’s MiniMed 600 series recall, and focused on “the inadequacy of specific medical device quality system requirements . . . in the areas of risk assessment, corrective and preventive action, complaint handling, device recalls, and reporting of adverse events.”
As a result of the Warning Letter—including the resulting uncertainty about FDA approval of the MiniMed 780G and other products in Medtronic’s diabetes operating unit, the Diabetes Group, Medtronic lowered its guidance for its Diabetes Group, now projecting that Diabetes Group product revenues would decline in the mid-single digit range for fiscal year 2022. On this news, the price of Medtronic common stock declined $6.75 per share, or approximately 6%, from a close of $111.69 per share on December 14, 2021, to close at $104.94 per share on December 15, 2021.
The financial fallout from the FDA’s findings continued to surface on May 26, 2022, when Medtronic reported its financial results for the fourth quarter and full fiscal year 2022, and provided guidance for fiscal year 2023. Notably, Medtronic disclosed that as a result of the company’s need to improve its quality control system and its expectation that the MiniMed 780G model—which Defendants had repeatedly identified as crucial to future growth—would not be approved in 2023, the company expected revenues from its Diabetes Group to decline between 6% and 7% in fiscal year 2023. On this news, the price of Medtronic common stock fell $6.10 per share, or nearly 6%, from a close of $105.54 per share on May 25, 2022, to close at $99.44 per share on May 26, 2022.
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 and operations by failing to disclose that: (1) Medtronic’s product quality control systems were inadequate; (2) Medtronic had failed to comply with numerous regulations regarding risk assessment, corrective and preventive action, complaint handling, device recalls, and reporting of adverse events; (3) these failures increased the risk of regulatory investigation and action; (4) as a result of the company’s misconduct, the FDA would delay the approval of additional Medtronic MiniMed devices, including the MiniMed 780G; (5) these delays in product approvals, as well as the company’s need to improve its quality control systems, would negatively affect Medtronic’s financial performance and cause it to fall further behind its competitors; and (6) as a result of the foregoing, Defendants’ statements about the company’s business, operations, and prospects lacked a reasonable basis.
If you purchased or otherwise acquired Medtronic shares and suffered a loss, are a long-term stockholder, 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 Melissa Fortunato by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out the form below. There is no cost or obligation to you.
The individual or institution below (“Plaintiff”) has reviewed and agrees to the Bragar Eagel & Squire, P.C. (“BESPC”) retainer agreement and authorizes BESPC to prosecute an action on Plaintiff’s behalf under the federal securities laws or applicable state laws to recover damages on behalf of investors in Medtronic PLC. BESPC will prosecute the action on a full contingency basis and will forward all costs and expenses.
Case Updates
Retainer Agreement
This will confirm that you have retained Bragar Eagel & Squire, P.C. (“BESPC”) to represent you in connection with potential litigation against Medtronic PLC (the “Company”) and its directors and officers. BESPC has conducted an investigation and believes that there is a valid basis to assert claims against the Company and its directors and/or officers for violation of federal or state securities laws.
In making this agreement, BESPC is relying upon your representation that you purchased the Company’s shares during the period from 6/8/2019 to 5/25/2022 (the “Relevant Period”). Please provide us with documentation of your trading history in the Company’s stock by emailing a relevant copies of your brokerage statements to investigations@bespc.com. If you have any questions or need assistance, please call us at (212) 308-5858.
The terms under which we will represent you and your responsibilities as a potential representative plaintiff are set forth below.
You will have an obligation to remain knowledgeable about the litigation and participate in decisions concerning the progress of the litigation. If BESPC is appointed as lead counsel or in a similar capacity in the action, we will provide you with copies of all pleadings in the litigation for your review and approval, circumstances permitting, before they are filed with the court. BESPC will also promptly advise you of any significant developments in the litigation.
As a representative plaintiff, you cannot have any interest antagonistic to or in conflict with other Class members or the Company, as applicable, concerning the claims we are pursuing or any relationships with any of the named defendants that would in any way impair your ability or incentive to obtain the best possible result. You agree that neither you nor any of your affiliates or agents will trade stocks while in the possession of any material non-public information you may receive in connection with the litigation. In addition, as a representative plaintiff, you may be required to continue holding Company shares. Please contact us before buying or selling Company shares.
BESPC may associate with other counsel to assist in the prosecution of this litigation. Any recovery of fees and costs will be shared with such counsel, determined on a percentage basis or based upon the time spent on the matter, as approved by the court if applicable. The division of work and or fees among co-counsel will not affect the amount of fees received upon a successful completion of the litigation. From time to time, BESPC may utilize contract attorneys to supplement the work of its own employed attorneys. BESPC will supervise the work of all contract attorneys and adopt their work product as its own. You authorize BESPC, as we deem appropriate, to associate with other counsel and to hire experts and consultants to assist in the handling of your claims.
It is possible that you will not be appointed as a lead plaintiff or class representative in the action. However, we may wish to represent you in other litigation related to the wrongful acts giving rise to this case. In such event, we will contact you to discuss the scope of such representation and obtain your approval before moving forward. You also agree that we may contact you with respect to other potential matters on your behalf.
You understand that in the event we secure a recovery for a Class in a class action, you will only be entitled to your proportional share of such recovery as a Class member. You understand that you will not receive any special treatment or receive a greater share of any class-wide recovery based on your service as a named plaintiff or class representative. However, we may ask the Court to approve an additional award to you to compensate you for the time and effort you expend on this matter. Any such award is solely within the discretion of the Court.
BESPC will consult with you regarding any settlement negotiations and seek to obtain your approval for any proposed resolution of this litigation before entering into a final settlement agreement with defendants.
You expressly acknowledge that we have not made any representation to you, express or implied, concerning the outcome of any litigation or other matter in which we represent you.
If you are not chosen as a representative plaintiff and we do not choose to pursue other related litigation on your behalf, we will provide you with notification and this Agreement shall terminate. Otherwise, this Agreement shall remain in effect until the conclusion of the relevant litigation. However, you may terminate this Agreement at any time.
Upon termination, BESPC’s files and papers compiled in connection with its investigation and prosecution of this matter constitute the work product and property of BESPC over which it has complete control with respect to its use and/or disclosure.
This agreement sets forth the entire agreement between the parties and supersedes all other oral or written communications.
Please feel free to contact us at any time should you have any questions or comments in this regard.
In making this agreement, BESPC is relying upon your representation that you purchased the Company’s shares during the period from 6/8/2019 to 5/25/2022 (the “Relevant Period”). Please provide us with documentation of your trading history in the Company’s stock by emailing a relevant copies of your brokerage statements to investigations@bespc.com. If you have any questions or need assistance, please call us at (212) 308-5858.
The terms under which we will represent you and your responsibilities as a potential representative plaintiff are set forth below.
Your Responsibilities as a Representative Plaintiff
As a representative plaintiff, you will have a duty to represent the interests of similarly situated shareholders, i.e., the “Class,” and to participate in the prosecution of this litigation. You may also be asked to provide documents concerning your trading in Company stock and may be asked to sit for a deposition. Accordingly, you should preserve all documents that relate to this case until it has concluded or we inform you otherwise. Relevant documents include any information you have about the Company or your trading in Company stock, no matter how it is recorded or who is keeping it for you. If you have any questions about whether information should be retained, please contact us.You will have an obligation to remain knowledgeable about the litigation and participate in decisions concerning the progress of the litigation. If BESPC is appointed as lead counsel or in a similar capacity in the action, we will provide you with copies of all pleadings in the litigation for your review and approval, circumstances permitting, before they are filed with the court. BESPC will also promptly advise you of any significant developments in the litigation.
As a representative plaintiff, you cannot have any interest antagonistic to or in conflict with other Class members or the Company, as applicable, concerning the claims we are pursuing or any relationships with any of the named defendants that would in any way impair your ability or incentive to obtain the best possible result. You agree that neither you nor any of your affiliates or agents will trade stocks while in the possession of any material non-public information you may receive in connection with the litigation. In addition, as a representative plaintiff, you may be required to continue holding Company shares. Please contact us before buying or selling Company shares.
Contingency Fee and Advancement of Expenses
BESPC will prosecute this litigation on a contingency basis. You will not be responsible for paying any legal fees, costs, or out-of-pocket expenses arising out of or related to the prosecution of this litigation, regardless of the outcome of the matter. If there is a monetary recovery in this action, BESPC will, at the conclusion of the litigation or any segment thereof, apply to the court for approval of an award of attorneys’ fees and reimbursement of expenses. BESPC may also seek a fee if we obtain substantial non-monetary relief for the Class or the Company. The court will then award fees and disbursements (if any) from the proceeds of any judgment or settlement obtained in this litigation, based on factors considered relevant by the court. Such fees, costs, and disbursements will be paid from the entire settlement amount and not only from your share of the settlement amount.
Association with Counsel
BESPC may associate with other counsel to assist in the prosecution of this litigation. Any recovery of fees and costs will be shared with such counsel, determined on a percentage basis or based upon the time spent on the matter, as approved by the court if applicable. The division of work and or fees among co-counsel will not affect the amount of fees received upon a successful completion of the litigation. From time to time, BESPC may utilize contract attorneys to supplement the work of its own employed attorneys. BESPC will supervise the work of all contract attorneys and adopt their work product as its own. You authorize BESPC, as we deem appropriate, to associate with other counsel and to hire experts and consultants to assist in the handling of your claims.
Other Actions
It is possible that you will not be appointed as a lead plaintiff or class representative in the action. However, we may wish to represent you in other litigation related to the wrongful acts giving rise to this case. In such event, we will contact you to discuss the scope of such representation and obtain your approval before moving forward. You also agree that we may contact you with respect to other potential matters on your behalf.
No Special Treatment
You understand that in the event we secure a recovery for a Class in a class action, you will only be entitled to your proportional share of such recovery as a Class member. You understand that you will not receive any special treatment or receive a greater share of any class-wide recovery based on your service as a named plaintiff or class representative. However, we may ask the Court to approve an additional award to you to compensate you for the time and effort you expend on this matter. Any such award is solely within the discretion of the Court.
Settlement
BESPC will consult with you regarding any settlement negotiations and seek to obtain your approval for any proposed resolution of this litigation before entering into a final settlement agreement with defendants.
No Guarantee of Success
You expressly acknowledge that we have not made any representation to you, express or implied, concerning the outcome of any litigation or other matter in which we represent you.
Termination of This Agreement
If you are not chosen as a representative plaintiff and we do not choose to pursue other related litigation on your behalf, we will provide you with notification and this Agreement shall terminate. Otherwise, this Agreement shall remain in effect until the conclusion of the relevant litigation. However, you may terminate this Agreement at any time. Upon termination, BESPC’s files and papers compiled in connection with its investigation and prosecution of this matter constitute the work product and property of BESPC over which it has complete control with respect to its use and/or disclosure.
This agreement sets forth the entire agreement between the parties and supersedes all other oral or written communications.
Please feel free to contact us at any time should you have any questions or comments in this regard.