Cases
QuidelOrtho Corporation
Corporate Governance / Derivative
Overview
Overview
- Date:
- 8/9/2024
- Company Name:
- QuidelOrtho Corporation
- Stock Symbol:
- QDEL
- Class Period:
- FROM 2/18/2022 TO 4/1/2024
- Status:
- Filed
- Filing Date:
- 4/12/2024
- Court:
- U.S. District Court: Southern District of New York
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 the form below. There is no cost or obligation to you.
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 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 QuidelOrtho Corporation. 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 QuidelOrtho Corporation (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 breach of fiduciary duties and other applicable laws.
In making this agreement, BESPC is relying upon your representation that you held the Company’s shares during the period from 2/18/2022 to 4/1/2024 (the “Relevant Period”) and that you continue to hold Company shares. 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 shareholders or the Company 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 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.
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 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.
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 held the Company’s shares during the period from 2/18/2022 to 4/1/2024 (the “Relevant Period”) and that you continue to hold Company shares. 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 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 shareholders or the Company 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 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, you will not receive any special treatment or receive a greater share of any recovery based on your service as a named plaintiff. 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.