January 15, 2021 - An investor in shares of Penumbra, Inc. (NYSE: PEN) filed a lawsuit in the U.S. District Court for the Northern District of California over alleged violations of Federal Securities Laws by Penumbra, Inc. in connection with certain allegedly false and misleading statements made between August 3, 2020 and December 15, 2020.
Alameda, CA based Penumbra, Inc. designs, develops, manufactures, and markets medical devices in the United States, Europe, Canada, Australia, Japan, and internationally. Until recently, one of the Company’s flagship products was the “Jet 7 Xtra Flex,” an aspiration catheter designed to be inserted into an affected artery, navigated to a blood clot, and used to suck the clot out of the patient’s body Penumbra, Inc. reported that its annual Total Revenue rose from $444.93 million in 2018 to $547.4 million in 2019, and that its EBIT increased from $29.98 million in 2018 to $47.5 million in 2019.
On November 10, 2020, a research report was issued on the Company entitled “Penumbra and its ‘Killer Catheter’: A tale of corporate greed and seemingly blatant disregard for patients’ lives[.]” On November 23, 2020, an article was published presenting the cases of three patients who suffered as a result of Jet 7 Xtra Flex device malfunctions, including two fatalities. As this report became more widely circulated, it caused Penumbra stock to fall from $254.71 on November 23, 2020, to $224.12 on November 25, 2020, a decline of about 12%.
On December 8, 2020, a follow-up research report was released entitled “Is Penumbra’s core scientific research authored by a fake person?: The incredible story of Penumbra’s Dr. Antik Bose[.]” The follow-up report alleged that some of Penumbra’s scientific research pieces appear to have been incorrectly attributed or even authored by a fake individual.
On December 15, 2020, after the market closed, Penumbra, Inc announced that it was issuing an “urgent” and “voluntary” recall of the Jet 7 Xtra Flex because the catheter “may become susceptible to distal tip damage during use” which could lead to injury or death. Shares of Penumbra, Inc. (NYSE: PEN) declined from $273.94 per share on November 12, 2020, to $171.22 per share on December 29, 2020.
According to the complaint the plaintiff alleges on behalf of purchasers of Penumbra, Inc. (NYSE: PEN) common shares between August 3, 2020 and December 15, 2020, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between August 3, 2020 and December 15, 2020, the Defendants failed to disclose to investors that the Jet 7 Xtra Flex had known design defects that made it unsafe for its normal use, that Penumbra did not adequately address the risk of Jet 7 Xtra Flex causing serious injury and deaths, which had in fact already occurred, that the Jet 7 Xtra Flex was likely to be recalled due to its safety issues, and that as a result, Penumbra’s public statements as set forth above were materially false and misleading at all relevant times.