The company behind last month’s ConforMIS knee recall is now facing a possible class action lawsuit for allegedly violating certain provisions of the Securities Exchange Act. The complaint, which was filed on September 17th in the U.S. District Court, District of Massachusetts, seeks class action status on behalf of all individuals or entities who purchased or acquired ConforMIS, Inc. stock between July 1, 2015 and August 28, 2015.
On August 31, 2015, ConforMIS recalled certain patient-specific instrumentation used with the iUni, iDuo and iTotal knee replacement product systems following complaints of moisture on the instrumentation. The affected instruments were distributed between July 18, 2015 and August 28, 2015.
According to the company, approximately 950 patient-specific instrumentation sets are affected by this recall, of which 650 have already been used in knee implant surgery. The company is seeking the return of the remaining 300 knee implant kits that include the affected instrumentation. According to the ConforMIS recall notice, the company does not believe that any of the customized knee implants included with the sets themselves were affected, and there have been no adverse event reports related to this matter.
In the wake of the recall, the price of ConforMIS stock dropped 14 percent to $16.95 in just a day. The company has also lowered its revenue estimates for the year, as its manufacturing capabilities will be substantially reduced in September and possibly October because of the recall.
The ConforMIS class action lawsuit alleges that defendants made false and/or misleading statements and/or failed to disclose that:
Individuals and entities who sustained a financial loss related to the ConforMIS knee recall have until November 2, 2015 to request lead plaintiff designation in the class action lawsuit.