NEW YORK, Sept. 14, 2023 (GLOBE NEWSWIRE) — Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the District of New Jersey on behalf of all persons or entities who purchased Integra Lifesciences Holdings Corporation (“Integra” or “Company”) (NASDAQ: IART) between March 11, 2019 through May 22, 2023, both dates inclusive (the “Class Period”).
Integra develops regenerative tissue technologies and neurological solutions. The Company’s Tissue Technologies business—which generates approximately one-third of Integra’s total revenue—manufactures and sells collagen-based medical devices that are used for complex wound care, peripheral nerve repair, and reconstruction surgery.
According to the Complaint, on October 9, 2018, the FDA began an inspection in the Boston Facility during which it observed that Integra’s quality systems and manufacturing conditions were “not in conformity with the current good manufacturing practice requirements of the Quality System Regulation.” The Complaint also alleges that as a result, on November 2, 2018, the FDA issued a Notice of Inspectional Observations on Form 483 (the “2018 Form 483”) to put Integra on notice of those violations.
The Complaint further alleges that after receiving the 2018 Form 483, Integra issued a series of responses purporting to address the problems identified by the FDA. According to the Complaint, on March 6, 2019, after concluding that Integra’s responses were “not adequate to address the . . . violations,” the FDA issued a warning letter (the “2019 Warning Letter”) further documenting the quality control and manufacturing problems at the Boston Facility and noting that the “deficiencies observed during our inspection are significant and demonstrate a systemic failure of your firm’s quality systems.” Most significantly, the Complaint alleges, the FDA noted that Integra had failed to adequately test for bacterial endotoxins in its medical devices manufactured at the Boston Facility.
The Complaint also alleges that in the wake of the 2019 Warning Letter, and throughout the Class Period, Integra assured investors that it was making improvements to remediate the violations in the Boston Facility.
In the third quarter of 2021, the Complaint alleges that the Company submitted an application to the FDA for premarket approval (“PMA”) for SurgiMend to be used in implant-based breast reconstruction. According to the Complaint, this was the first PMA application for an implant-based breast reconstruction surgical matrix and represented a major opportunity for the Company to grow SurgiMend’s addressable market. As such, throughout the Class Period, analysts and investors were keenly focused on the approval process. As part of the approval process, Integra and the SurgiMend product would be required to undergo rigorous testing and review by the FDA to assess the product’s safety, efficacy, and quality. Throughout the Class Period, the Complaint alleges that Integra repeatedly touted that it was on track to grow SurgiMend’s addressable market by obtaining FDA approval for use in post-mastectomy reconstruction.
The Complaint alleges that the truth began to emerge on April 26, 2023, when, before the market opened, the Company revealed that it had paused production at the Boston Facility. The Company also disclosed declining operating margins for the quarter and flat revenue growth projections, which the Company attributed to the manufacturing stoppage. As a result of these disclosures, the price of Integra common stock declined by $4.64 per share, or 8%. Later that day, after the market closed, Integra further revealed that, on March 1, 2023, the FDA had commenced another inspection at the Boston Facility and that the Company expected to receive another Form 483 as a result of that inspection.
Then, on May 23, 2023, the Complaint alleges the Company announced a “recall” of all products manufactured at the Boston Facility between March 1, 2018 and May 22, 2023. According to the Complaint, Integra explained that it had determined that the Boston Facility deviated from good manufacturing practices in testing for bacterial endotoxin and allowed the release of products with unsafe levels of endotoxins. The Company, the Complaint alleges, also extended the pause on all production at the Boston Facility and as a result of the recall and manufacturing shutdown, the Company revised its guidance for the second quarter of 2023, lowering its revenue expectations by 6% and adjusted earnings per diluted share by 26%. The Company further disclosed that it expected to take a $22 million impairment charge in the second quarter due to the inventory write-off. The Complaint alleges that these disclosures caused the price of Integra stock to decline by an additional $10.24 per share, or 20%.
As a result of Defendants’ alleged wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common stock, the Complaint alleges that Plaintiff and other Class members have suffered significant losses and damages when the truth was revealed.
Investors who purchased or otherwise acquired shares of Integra should contact the Firm prior to the November 13, 2023 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
