NEW YORK, Sept. 21, 2022 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Medtronic PLC MDT and Palantir Technologies, Inc. PLTR. Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Medtronic PLC MDT
Class Period: June 8, 2019 – May 25, 2022
Lead Plaintiff Deadline: November 7, 2022
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.
For more information on the Medtronic class action go to: https://bespc.com/cases/MDT
Palantir Technologies, Inc. PLTR
Class Period: November 9, 2021 – May 6, 2022
Lead Plaintiff Deadline: November 14, 2022
Palantir builds and deploys software platforms to assist the U.S. intelligence community in counterterrorism investigations and operations. The Company has two operating segments, commercial and government, with the latter primarily serving agencies in the U.S. federal government and non-U.S. governments. Palantir also invests in so-called “marketable securities” consisting of equity securities in publicly-traded companies.
Palantir has consistently described sources of geopolitical instability and other disruptions—e.g., armed conflicts, economic crises, and the COVID-19 pandemic—as tailwinds for its business, given that the Company’s products and services are purportedly built to aid its customers in assessing and responding to such disruptions.
On May 9, 2022, Palantir issued a press release announcing its Q1 financial results and guidance for Q2. For Q1, Palantir announced adjusted EPS of $0.02, compared to analyst estimates of $0.04 per share, noting on a conference call that the “[f]irst quarter adjusted [EPS of] $0.02 . . . includes a negative $0.02 impact driven primarily by unrealized losses on marketable securities.” The Company also disclosed that government revenue grew by only 16% year-over-year for Q1, representing a significant slowdown in revenue growth compared to prior quarters, and that, for Q2, the Company expected $470 million in sales, compared to estimates of $483.76 million.
On this news, Palantir’s stock price fell $2.02 per share, or 21.31%, to close at $7.46 per share on May 9, 2022.
As multiple news outlets reported that day, Palantir’s significant decline in revenue growth, particularly from its government customers, surprised investors, especially given the ongoing geopolitical instability and other disruptions caused by, inter alia, the ongoing COVID-19 pandemic and Russo-Ukrainian War—that is, precisely the type of destabilizing conditions that the Company had previously touted as tailwinds for its business.
The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Palantir’s investments in marketable securities were having a significant negative impact on the Company’s earnings per share (“EPS”) results; (ii) Palantir overstated the sustainability of its government segment’s growth and revenues; (iii) Palantir was experiencing a significant slowdown in revenue growth, particularly among its government customers, despite ongoing global conflicts and market disruptions; (iv) as a result of all the foregoing, the Company was likely to miss consensus estimates for its first quarter 2022 (“Q1”) EPS and second quarter 2022 (“Q2”) sales outlook; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.
For more information on the Palantir class action go to: https://bespc.com/cases/PLTR
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. 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, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.