Robbins LLP: Insulet Corporation (PODD) Misled Shareholders According to a Shareholder Derivative Lawsuit
Robbins LLP announces that a shareholder derivative complaint was filed on behalf of Insulet Corporation (NasdaqGS: PODD). The complaint is brought against certain current and former officers and directors for alleged breaches of fiduciary duties and unjust enrichment from May 7, 2013 through the present. Insulet, a medical device company, develops, manufactures, and sells insulin delivery systems for people with insulin-dependent diabetes in the United States and internationally. In 2013, Insulet began selling a new version of its infusion system known as the OmniPod Eros.
Insulet Accused of Concealing Glitches with its Infusion System
According to the complaint, Insulet officials repeatedly touted the functionality and quality of the Eros, the growth of Insulet’s OmniPod business, and the increase in the number of new Eros patients. However, Insulet was actually experiencing significant manufacturing and quality issues with Eros, including defective needle and alarm mechanisms. On January 7, 2015, Insulet disclosed that its fourth quarter 2014 revenue would be $5 to $8 million less than the company’s recent guidance due to reduced demand for Eros from Insulet’s distributors. Insulet’s Chief Executive Officer, Patrick Sullivan, subsequently admitted that Eros had experienced serious problems and that the company’s new patient growth in the U.S. had truly been declining rather than increasing over the past year. Insulet had been masking the deterioration in its core business by manipulating the use of the “new patient stats” metric, which were inflated and misleading.
Insulet Shareholders Have Legal Options
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