MassDevice

The Medical Device Business Journal — Medical Device News & Articles | MassDevice

Home » Shareholders slap CardioNet with lawsuits

Shareholders slap CardioNet with lawsuits

By

Shareholders of CardioNet Inc. are suing the mobile cardiac monitoring firm and two of its senior managers, alleging that they falsely inflated the company’s prospects ahead of a damaging reimbursement rate cut.

The lawsuits, filed in the U.S. District Court for Eastern Pennsylvania, accuse CardioNet, chairman, president and CEO Randy Thurman and CFO Martin Galvan of issuing too-aggressive earnings forecasts that sent the company’s stock soaring to artificially high levels.

Shares reached $19.60 May 19, according to court documents, after the company released its guidance for 2009 through 2011. But on June 30, CardioNet lowered its 2009 guidance and rescinded its forecast for 2010 and 2011 “based on lower-than-anticipated commercial reimbursement rates,” according to the documents.

That sent shares plunging more than 41 percent to $9.57 July 1, down from $16.32 on June 30.

Then came news that Pennsylvania’s Medicare carrier, Highmark Medicare Services, was slashing its reimbursement rate for Mobile Cardiac Outpatient Telemetry by 33 percent.

That prompted CardioNet to rescind its 2009 guidance and sent share prices down another 34 percent, from $8.83 to a $5.87 close July 13.

The class-action suits, which affect anyone who bought CardioNet stock between April 30 and July 10, ask for compensatory damages and interest and jury trials.

In case you missed it

RSS From Medical Design & Outsourcing

  • Medtronic’s recall of HawkOne system is Class I
    The FDA today issued a notice confirming that the recall of Medtronic’s (NYSE:MDT) HawkOne system is Class I, the most serious kind. So far in 2022, the FDA has classified three Medtronic-related recalls as Class I, with the Covidien (part of Medtronic) Puritan Bennett 980 series ventilator and the Synergy Cranial and StealthStation S7 Cranial software receiving the same classification earlier… […]
  • January 2022 Issue: The pandemic tested Metronic’s mettle
      The pandemic tested Medtronic’s mettle: Its CFO explains how How Abbott seeks to improve care, health inequities for people with cardiovascular disease Medtech’s biggest personnel changes in 2021 The top 5 medtech news stories of 2021 Some thoughts for medtech leaders in 2022 Starting our third year of the COVID-19 pandemic, I wonder when… […]
  • Feinstein Institutes researchers develop tiny implantable neurostimulator for mouse studies
    Researchers have developed a novel, fully implantable wireless bidirectional vagus nerve stimulation (VNS) and sensing device for mice. Engineers and researchers at the Institute of Bioelectronic Medicine at The Feinstein Institutes for Medical Research published details about the device and its capabilities in Biosensors and Bioelectronics. They think the device has the potential to transform how… […]
  • MIT team working on all-in-one diabetes management devices
    MIT researchers are touting a platform aimed at helping patients maintain healthy glucose levels by streamlining the diabetes management process. The MIT researchers say it’s hard for people with diabetes to maintain a treatment regimen. Typically at every meal, they need to estimate carbohydrate content, draw blood to measure blood glucose levels, and calculate the… […]
  • Element expands life sciences testing business with pharma, biotech capabilities
    Element Materials Technology recently announced that with the completed acquisition of JMI Laboratories in 2021, it has built out its life sciences testing capabilities for the pharmaceutical and biopharmaceutical industries. The acquisition added more than 1,000 experts in 23 facilities in North America and Europe and marked a strategic shift for the London-based company to… […]
  • Team Technologies acquires consumable medical device manufacturer iiMed
    Team Technologies recently announced that it acquired consumable medical device manufacturer iiMed Medical Solutions for an undisclosed amount. The acquisition is the fourth purchase since Clearlake Capital Group invested in the company in 2018. It is the eighth transaction completed by the company since 2012. Nearshore specialty manufacturer iiMed makes FDA Class I and Class… […]
  • P-Duke Technology is selling dc/dc converters for medical
    P-Duke Technology is promoting its MPS and MPH series of medical dc/dc converters. The MPS and MPH series comply with Medical EN60601-1 and I.T.E. EN 62368-1 certifications, according to the company. They provide 2W and 3.5W output power, 2:1 input range, regulated 5, 9, 12, 15, 24, ±12, ±15 VDC output voltage, and both DIP16… […]
  • Philips backing efforts to reduce CIED infections
    Royal Philips (NYSE:PHG) announced today that it supports the American Heart Association’s efforts to reduce CIED infections. Amsterdam-based Philips offered its support to the initiative to generate awareness among cross-disciplinary specialties and improve survival rates from CIED (cardiovascular implantable electronic device) infections. The company said in a news release that, with its support, the American… […]
  • Democratic senator wants COVID-19 test-makers to lower prices
    Sen. Ed Markey, D-Massachusetts, has sent letters to CEOs of at-home COVID-19 test-makers, asking why tests are selling for as much as $12 apiece. In a letter sent today to Abbott CEO Robert Ford, for example, Markey cited a Reuters story from October 2021 in which British test-maker Mologic said that rapid antigen tests can… […]
  • These medtech companies care a lot about research
    They’re making glaucoma-treating stents, tumor-treating fields, coin-sized CGMs and more. Discover the medtech companies that spend the most on research as a percentage of revenue. The list comes from our annual Big 100 report, which examines the world’s 100 largest medical device companies and ranks them by revenue. (Check out our full Big 100 report… […]
  • Traco Power launches new AC/DC power supplies
    Traco Power (Baar, Switzerland) announced its newest high efficiency, miniaturized ac/dc power supplies: the TPP 180 series for medical and industrial and TPI 180 for industrial. The power supplies measure only 2-by-3-by-1.24 inches in the open frame version — with global safety approvals for medical or industrial markets. They come in16 standard models with single… […]

Leave a Reply