NEW YORK–(BUSINESS WIRE)–Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed against Medtronic PLC (“Medtronic” or the “Company”) (NYSE :MDT) in the District of the United States 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 ask the Court to be named lead plaintiff in the lawsuit.
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Medtronic is a medical device company. Among its products is the MiniMed insulin pump system for the treatment of diabetes. 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 closed-loop hybrid system. During the Class Period, Medtronic repeatedly assured investors that the MiniMed 780G model was “on track” for U.S. Food and Drug Administration (“FDA”) approval 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 MiniMed 600 series models. Indeed, in November 2019, the company issued a warning that some MiniMed 600 series insulin pumps may have pump retaining rings. damaged, which could cause the system to release too much insulin, and asked customers with damaged bands to contact the company to have them replaced. 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 escalated in October 2021, when the company extended its recall to everything MiniMed Model 630G and 670G insulin pump systems – whether or not a retaining ring has been damaged. Despite these serious issues with the 600 series, Medtronic assured investors that they expect the MiniMed 780G to “drive growth.” Consistent with these upbeat statements, Medtronic has again assured investors that FDA approval of the MiniMed 780G is imminent.
Investors began to uncover the truth about the company’s MiniMed operations on December 15, 2021, when Medtronic disclosed that it had received a warning letter from the FDA regarding its Northridge, Calif. ‘Warning “). The warning letter followed an FDA inspection of the company’s MiniMed 600 series recall and focused on “inadequacy of specific medical device quality system requirements . . . in the areas of risk assessment, corrective and preventive measures, complaint handling, device recalls and adverse event reporting.
As a result of the warning letter, including the resulting uncertainty over FDA approval of MiniMed 780G and other products in Medtronic’s Diabetes business unit, the Diabetes Group, Medtronic lowered its guidance for its Diabetes Group, now expecting Diabetes Group product revenue to decline in the mid-single digit range for fiscal 2022. On this news, Medtronic’s common stock price fell 6 $.75 per share, or approximately 6%, from a close of $111.69 per share on Dec. 14, 2021, to close at $104.94 per share. share on December 15, 2021.
The financial fallout from the FDA findings continued to surface on May 26, 2022, when Medtronic released its fourth quarter and full year 2022 financial results, and provided guidance for fiscal year 2023. Notably, Medtronic revealed 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 for future growth – would not not approved in 2023, the company expected revenue from its Diabetes Group to decline between 6% and 7% in fiscal 2023. On this news, Medtronic’s common stock price fell 6, $10 per share, or nearly 6%, from a close of $105.54 per share on May 25, 2022 to $99.44 per share on May 26, 2022. .
Throughout the Class Period, the Defendants made materially false and/or misleading statements, and failed to disclose material adverse facts, regarding the business and operations of the company by failing to disclose that: (1) Medtronic’s product quality control systems were inadequate; (2) Medtronic failed to comply with numerous regulations regarding risk assessment, corrective and preventive actions, complaint handling, device recalls, and adverse event reporting; (3) these failures increased the risk of regulatory investigation and action; (4) due to company misconduct, the FDA would delay approval of other Medtronic MiniMed devices, including the MiniMed 780G; (5) these delays in product approvals, together with the company’s need to improve its quality control systems, would adversely affect Medtronic’s financial performance and cause it to fall even 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 have purchased or otherwise acquired Medtronic stock and suffered a loss, are a long-term shareholder, have information, want to know more about these claims, or have questions about this announcement or your rights or interests in these questions, please contact Brandon Walker or Melissa Fortunato by email at [email protected], by phone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation for you.
About Bragar Eagel & Squire, PC:
Bragar Eagel & Squire, PC 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, derivatives and other complex litigation before state and federal courts across the country. For more company information, please visit www.bespc.com. Lawyer advertisement. Prior results do not guarantee similar results.