If you suffered losses exceeding $100,000 investing in iRhythm stock or options between January 11, 2022, and May 30, 2023 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310). You may also click here for additional information: www.faruqilaw.com/IRTC.
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NEW YORK, Feb. 23, 2024 (GLOBE NEWSWIRE) — Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against iRhythm Technologies, Inc. (“iRhythm” or the “Company”) (NASDAQ: IRTC) and reminds investors of the April 8, 2024 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
Faruqi & Faruqi is a leading minority and Woman-owned national securities law firm with offices in New York, Pennsylvania, California and Georgia.
As detailed below, the complaint alleges that the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that, throughout the Class Period, Defendants falsely represented to investors that the Zio AT monitor was a real-time monitor intended for high-risk patients. Specifically, Defendants repeatedly touted the potential growth for the Zio AT as an innovative product that had only just begun to penetrate the market for real-time monitoring, which investors looked upon favorably given the premium selling price associated with devices approved for high-risk patients. As a result of these misrepresentations, the price of iRhythm common stock traded at artificially inflated prices throughout the Class Period.
The truth emerged through a series of disclosures beginning on November 1, 2022, when the Company reported revised fourth quarter and full-year guidance, in part due to “Zio AT utilization.” The Company explained during a conference call with investors that “coming into the fourth quarter, [iRhythm] voluntarily issued a Customer Advisory Notice to [its] Zio AT customers.” Consequently, the Company lowered its Zio AT forecast for the quarter from the 40% growth target it had provided through the past three quarters to just 20%. Three days later, on November 4, 2022 the Company disclosed that it initiated the Customer Advisory Notice on September 28, 2022, following issues raised by the FDA during an inspection that culminated in an inspection observation report on Form 483, and that the Customer Advisory Notice warned patients of a “labeling correction” related to “the device’s maximum transmission limits during wear,” as well as other critical issues that prevent the device from working as advertised. However, Defendants tried to assuage investors’ concerns and continued to tout the growth of the Zio AT.
Then, on May 4, 2023, the Company announced that “on April 4, 2023, [it] received a Subpoena Duces Tecum from the Consumer Protection Branch, Civil Division of the U.S. Department of Justice, requesting production of various documents regarding [its] products and services.” Although the Company refrained from providing additional detail about the DOJ’s request, in a May 5, 2023, report, J.P. Morgan analysts noted that one of iRhythm’s competitors, Boston Scientific, had also disclosed that it received a subpoena from the DOJ relating to its real-time monitoring product, which indicated to the analysts that the DOJ investigation into iRhythm was related to the Zio AT.
Finally, on May 30, 2023, iRhythm disclosed that it had received a warning letter from the FDA, which addressed a series of deficiencies tied to the marketing and capabilities of the Zio AT device. In particular, the FDA noted that iRhythm had falsely marketed the Zio AT as approved for use in high-risk patients that require real-time cardiac monitoring. In truth, according to the FDA, Zio AT is only approved for “long-term monitoring of arrhythmia events for non-critical care patients where real-time monitoring is not needed.” As a result of these disclosures, the price of iRhythm common stock declined precipitously.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding iRhythm’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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