Organogenesis Holdings Inc.
Organogenesis Holdings Inc. (“Organogenesis” or the “Company”) is a regenerative medicine company that develops, manufactures, and commercializes solutions for the advanced wound care and surgical and sports medicine markets in the U.S. The Company’s products include, among others, “Affinity” and “PuraPly XT”. Affinity is a wound covering product used to support the treatment of a variety of wound sizes and types. PuraPly XT is an antimicrobial barrier used for a broad variety of wound types.
On October 12, 2021, an anonymous short report addressing Organogenesis was published on Value Investors Club, an online website where investors share investment ideas (the “VIC Report”). The VIC Report alleged, among other issues, that the Company has been improperly billing the federal government for $250 million annually. The VIC Report also alleged that the Company had set the price for its new wound covering, Affinity, “exorbitantly high[,]” which Medicare reimbursed, while making the product lucrative for doctors to use through large rebates, and that the Company employed a similar tactic for its new PuraPly XT product.
On this news, Organogenesis’ stock price fell $1.70 per share, or 14.11%, to close at $10.35 per share on October 12, 2021.
A securities class action has been filed against Organogenesis on behalf of shareholders that purchased Organogenesis shares between March 17, 2021 and October 11, 2021. This case has been filed in the U.S. District Court for the Eastern District of New York.
The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Organogenesis improperly billed the federal government for its Affinity and PuraPly XT products by, among other things, setting the price for those products multiple times higher than similar products; (ii) the Company improperly induced doctors to use its Affinity and PuraPly XT products through lucrative reimbursements; (iii) as a result of all the foregoing, the Company’s revenue and profits derived from its Affinity and PuraPly XT products were at least in substantial part unsustainable; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
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