Deadline Established For Lead Plaintiff in Class Action Lawsuit Over Penumbra Jet 7 Xtra Flex Catheter
Following the filing of a class action lawsuit over Penumbra Jet 7 Xtra Flex catheter problems which were not adequately disclosed by the manufacturer, investors seeking to serve as lead plaintiff in the litigation have until March 16 to file a complaint.
In December, the FDA sent a letter to healthcare providers warning about serious Penumbra Jet 7 Xtra Flex catheter risks, following more than 200 adverse event reports and at least 14 deaths that resulted from catastrophic failures.
Following this action, a class action lawsuit was filed against Penumbra, Inc., the company’s CEO Adam Elsesser and the Executive Vice President and the head of global marketing, Gita Berry, indicating that investors who purchased shares between August 3, 2020 and December 15, 2020 should be entitled to damages due to false and misleading statements, which allegedly violate federal securities laws.
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The complaint was originally filed by Charles Williams, and has been assigned to U.S. District Judge Susan Illston in the U.S. District of Northern California, according to an order (PDF) issued on January 19, which indicates an initial case management conference will be held on May 7.
Those desiring to be lead plaintiffs in the class action reportedly have until March 16 to join the class action, according to press releases issued by securities fraud lawyers investigating potential claims.
The Jet 7 Xtra Flex catheter was one of Penumbra’s “flagship” products, which was designed to be inserted into an affected artery, navigated to a blood clot and used to suck the clot out of a patient’s body. However, by mid 2020, the lawsuit indicates Penumbra knew about problems with the catheter, after a distributor in Japan sent a warning to hospitals about catheter failures, and stopped selling the product in the country.
Approximately one month later, on July 27, 2020, Penumbra sent a warning to physicians and other healthcare providers about incidents where the distal tip broke or expanded, which put patients at risk of serious injury or death. However, in a financial report issued in August, the company told investors that the catheter’s performance was “exactly what we hoped it would be.”
Following the December Penumbra catheter recall, the manufacturer’s stock price fell about nine percent, from $224.02 per share to $204.07 per share overnight, which was a drop of $19.95 per share.
The Penumbra class action lawsuit seeks to pursue damages on behalf of all investors who purchased common stock during after June 2020, which it says was traded at artificially high prices due to the company’s misrepresentations. The company is also expected to face a number of individual catheter failure lawsuits brought by individuals who experienced problems with the device, or by family members now pursuing wrongful death lawsuits.
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