AxoGen investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, AxoGen provides surgical solutions for physical damage or discontinuity to peripheral nerves. Its products include nerve allografts and extracellular matrices. The Class Period commences on August 2, 2017, when AxoGen filed its quarterly report on a Form 10-Q for the period ended June 30, 2017.
According to the complaint, on December 18, 2018, Seligman Investments published a report stating, among other things, that: former employees allege channel stuffing and backdating of revenue; the number of active accounts may be overstated by a factor of ten; AxoGen’s “growth [is] driven by unsustainable, aggressive price increases;” and the payments to physicians relative to revenue creates “elevated risks relating to pay-to-play and anti-kickback laws.” Following this news, AxoGen’s share price fell $6.17 per share, or nearly 22%, to close at $21.36 per share on December 18, 2018. The share price continued to decline over the course of the next three trading sessions, dropping $1.53 on December 19, 2018, $1.94 on December 20, 2018, and $0.80 on December 21, 2018, to close at $17.09 per share on December 21, 2018. The total decline over the course of the three trading sessions was $4.27, or nearly 20%.
The complaint alleges that the statements at issue were false and misleading and omitted to state material adverse facts, and that throughout the Class Period, the defendants failed to disclose to investors that: (1) AxoGen aggressively increased prices to mask lower sales; (2) AxoGen’s pricing alienated customers and threatened AxoGen’s future growth; (3) ambulatory surgery centers form a significant part of the market for AxoGen’s products; (4) such centers were especially sensitive to price increases; (5) AxoGen was dependent on a small number of surgeons whom AxoGen paid to generate sales; (6) AxoGen’s consignment model for inventory was reasonably likely to lead to channel stuffing; (7) AxoGen offered purchase incentives to sales representatives to encourage channel stuffing; (8) AxoGen’s sales representatives were encouraged to backdate revenue to artificially inflate metrics; (9) AxoGen lacked adequate internal controls to prevent such channel stuffing and backdating of revenue; (10) AxoGen’s key operating metrics, such as number of active accounts, were overstated; and (11) as a result of the foregoing, the defendants’ positive statements about AxoGen’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
If you are a member of the class described above, you may no later than March 11, 2019 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at email@example.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
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