Edwards Lifesciences Faces Legal Action over Heart Valve Sales

Qmed Staff

September 20, 2013

1 Min Read
Edwards Lifesciences Faces Legal Action over Heart Valve Sales

Edwards Lifesciences faces legal action over alleged false claims. In the lawsuit, investors accuse the company of making misleading statements and misrepresenting total heart valve sales.

In April of this year, Edwards reduced its 2013 earnings forecast by 5%, reflecting a slower start to the year. After revising its earnings forecast, the company's stock dropped 20%. In response to this, shareholders launched a class action suit against the company, demanding legal fees, interest and monetary damages. To qualify for the class action, investors must have owned the stock between April 25th of 2012 and April 23rd of 2013.

In the complaint, investors allege that the company knew that Sapien valve adoption would be slow. However, the company is alleged to have forecast very high sales to boost its stock. In October, the company's stock reached a high of $110.79. At that time, investors believed the company would pull in $790 million from sales of its Sapien valves. However, this number was reduced by 41% the next year.

Edwards Lifesciences hasn't had a very pleasant year. In May, the company attempted to improve shareholder confidence through a $750 million share buyback program. In a show of good faith, CEO Michael Mussallem threw in $5 million of his own money.

While this action helped to boost share prices by approximately 15%, a warning letter from FDA regulators in late May led to a stock downturn yet again.

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