Intersect ENT, Inc. (XENT) Accused of Misleading Investors
According to the complaint, in August 2018, Intersect ENT revealed that it was facing challenges with the launch of SINUVA, which negatively impacted its second quarter 2018 financial results. In a conference call discussing Intersect ENT’s quarterly results, CEO Earnhardt noted that Intersect ENT was adding to its reimbursement leadership to focus on payer outreach and field support. However, Intersect failed to disclose to investors that it lacked adequate reimbursement representatives to ensure physicians had access to SINUVA. The company refocused its sales force to help with reimbursement instead of driving sales growth, but physicians became less likely to adopt SINUVA due to transaction costs associated with seeking reimbursement. In May 2019, Intersect ENT disclosed a first quarter 2019 loss of $10.8 million and lowered guidance for the remainder of 2019. It also reported that Earnhardt, CEO of 11 years, had resigned. On this news, Intersect ENT’s share price fell more than 25% to close at $25.10 per share on May 7, 2019, and has yet to recover.