Medtronic PLC (MDT) Had Inadequate Quality Control Systems, Which Delayed the Approval of its MiniMed 780G Device and Caused Shareholders Financial Harm
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Medtronic PLC (NYSE: MDT) common stock between June 8, 2019 and May 25, 2022, for violations of the Securities Exchange Act of 1934. Medtronic is a medical device company. Among its products is the MiniMed insulin pump system for the treatment of diabetes, including the MiniMed 780G model. Medtronic is currently seeking regulatory approval for the MiniMed 780G.
According to the complaint, during the class period, defendants repeatedly assured investors that the MiniMed 780G model was “on track” for approval by the U.S. Food and Drug Administration (the “FDA”) and would provide the Company with the edge it needed to close a growing gap with its competitors in the diabetes market.
On December 15, 2021, Medtronic revealed it had received a warning letter from the FDA regarding its Northridge, California facility. The Warning Letter followed an FDA inspection relating to the Company’s MiniMed 600 series recall, and focused on “the inadequacy of specific medical device quality system requirements . . . in the areas of risk assessment, corrective and preventive action, complaint handling, device recalls, and reporting of adverse events.” As a result of the Warning Letter, Medtronic lowered its guidance for its Diabetes Group. On this news, the price of Medtronic common stock declined $6.75 per share, or approximately 6%, to close at $104.94 per share on December 15, 2021.
On May 26, 2022, Medtronic reported its financial results for the fourth quarter and full year of fiscal year 2022, and provided guidance for fiscal year 2023. Notably, Defendants disclosed that as a result of the Company’s need to improve its quality control system and its expectation that the MiniMed 780G model—which defendants had repeatedly identified as crucial to future growth—would not be approved in 2023, the Company expected revenues from its Diabetes Group to decline between 6% and 7% in fiscal year 2023. On this news, the price of Medtronic common stock fell $6.10 per share, or nearly 6%, from a close of $105.54 per share on May 25, 2022, to close at $99.44 per share on May 26, 2022.
Next Steps: If you acquired shares of Medtronic PLC between June 8, 2019 and May 25, 2022, you have until November 7, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.