A securities class action has been filed in the USDC – E.D.N.Y. against ICON plc (ICLR) (“ICON” or the “Company”), on behalf of all persons and entities that purchased or otherwise acquired ICON ordinary shares between July 27, 2023, and October 23, 2024, both dates inclusive (the “Class Period”).
ICON is a clinical research organization (“CRO”). As a CRO, ICON provides a range of services that help pharmaceutical companies bring new drugs and medical devices market. These services principally include conducting all aspects of phase I to phase IV clinical trials.
The Complaint alleges that the Defendants made materially false and/or misleading statements because they failed to disclose the following adverse facts pertaining to the Company’s business, operations, and financial condition, which were known to defendants or recklessly disregarded by them as follows:
(a) that ICON was suffering from a material loss of business due to customer cost reduction measures and other widespread funding limitations impacting the Company’s client base;
(b) that ICON’s purported FSP and hybrid model offerings were insufficient to shield the Company from the adverse effects of a significant market downturn;
(c) that the RFPs ICON received from its biotechnology customers during the Class Period were used in substantial part as price discovery tools, and thus were not indicative of underlying client demand;
(d) that ICON’s customers had canceled contracts, limited or reduced engagements, delayed clinical trial work, and/or failed to enter into new contracts with ICON for additional clinical trial work at historical rates once existing projects ended (or were scheduled to end) in 2024;
(e) that ICON’s two largest customers were diversifying their CRO providers away from the Company;
(f) that as a result of (a)-(e) above, ICON’s reported net new business awards and book-to-bill metrics materially misrepresented client demand for ICON’s services; and
(g) that as a result of (a)-(f) above, ICON was tracking materially below the 2024 revenue and EPS guidance issued during the Class Period and such guidance lacked a reasonable factual basis.
As a result of the disclosures regarding the Company’s reported financial results, the price of ICON ordinary shares fell from $280.76 per share on October 23, 2024 to $220.47 per share on October 25, 2024, a decline of more than 20% over a two-day trading period, on above-average trading volume.
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