Outset Medical, Inc. (OM) Securities Class Action

The litigation focuses on the propriety of Outset Medical’s disclosures about its business prospects and operations, specifically those concerning its Tablo Hemodialysis System (“Tablo products”). The company received Section 510(k) clearance from the FDA on July 29, 2022 for the Tablo products “as indicated for use in patients with acute and/or chronic renal failure, with or without ultrafiltration, in an acute or chronic care facility” and “in the home.”

The complaint alleges that Outset Medical made false and misleading statements and failed to disclose that: (1) the Tablo products were marketed for continuous renal replacement therapy, which is not one of the indications approved by the FDA; (2) as a result, it was reasonably likely to submit an additional 510(k) application to the FDA for the Tablo products; (3) there was a substantial risk that it would cease sales of the Tablo products pending FDA approval for additional indications; (4) it lacked the sales team and process to execute on the ramping of Tablo sales; and (5) as a result of the foregoing, its revenue growth would be adversely impacted.

Investors began to learn the truth on July 7, 2023, when Outset Medical revealed it received a warning letter from the FDA asserting that the company was promoting a Tablo product (the “TabloCart”) that was not authorized for use under the existing 510(k).

Then, on August 2, 2023, the company disclosed that it was pausing shipments of the TabloCart pending an additional 510(k) application and FDA clearance.

Next, investors learned that the FDA warning and cessation of TabloCart sales would negatively affect Outset Medical’s financial performance. On October 12, 2023, the company announced disappointing Q3 2023 financial results and guidance that indicated dampening growth attributable to the FDA warning letter.

Later, on August 7, 2024 the company released disappointing Q2 2024 financial results and guidance, while revealing the need to take “clear steps to improve our execution” including “sales team and process restructuring[]” and that it would not meet previous sales forecasts for TabloCart sales.

All of these events drove the price of Outset Medical shares sharply lower.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the OM securities class-action case about?

We are looking into whether Outset Medical may have knowingly tried to skirt the 2022 510(k) FDA clearance and misled investors about the strategy and financial repercussions of getting caught.

WHAT SHOULD I DO?

I worked at OM. What should I do?

If you were an employee of OM, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in OM, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any OM investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.