Einhorn v. AxoGen, Inc., et al 8:19-cv-00069-EAK-AAS — On January 9, 2019, investors sued AxoGen, Inc., (“AxoGen” or the “Company”) in United States District Court, Middle District of Florida. The AXGN class action alleges that Plaintiffs acquired AxoGen stock at artificially inflated prices between August 7, 2017 and December 18, 2018 (the “Class Period”); or in connection with the Company’s November 2017 or May 2018 SPOs. They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the AXGN Lawsuit, please contact us today!
Summary of the Allegations
According to its website, AxoGen (NASDAQ: AXGN) is “the leading company focused specifically on the science, development and commercialization of technologies for peripheral nerve regeneration and repair.”
As such, it creates and provides “products and technologies” that are “designed to overcome fundamental challenges in nerve reconstruction and offer off-the-shelf solutions to surgeons for a wide variety of peripheral nerve damage.” AxoGen say reconstructive plastic surgeons, hand surgeons and oral and maxillofacial surgeons use its products “in a wide variety of nerve repair surgeries.”
Summary of Facts
AxoGen and two of its senior officers (the “Individual Defendants”) now stand accused of deceiving investors by lying and withholding critical information about AxoGen’s business practices and prospects during the Class Period.
Specifically, they are accused of omitting truthful information about AxoGen’s sales and ancillary issues from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused the Company’s stock to traded at artificially prices during the time in question.
Along with the Individual Defendants, one senior officer and seven directors who either signed or authorized the signing of allegedly false and misleading Registration Statements for the SPOs; and five companies that served as underwriters for the SPOs are named as defendants in the January 9 complaint.
The truth came in a report issued by Seligman Investments on December 18, 2018. Among other things, the report included statements that: ”former employees allege channel stuffing and backdating of revenue, that the number of active accounts may be overstated by a factor of ten, that the Company’s ‘growth [i]s driven by unsustainable, aggressive price increases,’ [and] ‘that the payments to physicians relative to revenue ‘creates elevated risks relating to pay-to-play and anti-kickback laws.’”
A closer look…
As alleged in the January 9 complaint, the Company and/or Individual Defendants repeatedly made false and misleading public statements during the Class Period.
For instance, on a form filed with the SEC at the beginning of the Class Period, the Company stated in relevant part: “…revenue growth is primarily due to increased purchases from active accounts, followed by revenue growth from new accounts.”
Then, in its November 2017 Registration Statement, AxoGen addressed product pricing, saying in relevant part: “AxoGen’s operating results will be harmed if it is unable to effectively manage and sustain its future growth or scale its operations.”
Finally, in its November 2017 Registration Statement, AxoGen also addressed its customers dependence on reimbursements, saying in pertinent part: “AxoGen’s revenues depend upon prompt and adequate reimbursement from public- and private insurers and national health systems.”
Impact of the Alleged Fraud on AxoGen’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:
|Closing stock price the trading day after disclosures:
|One day stock price decrease (percentage) as a result of disclosures:
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: The deadline to file for lead plaintiff in this class action is March 11, 2019. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in AxoGen common stock using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.