Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 1 of 25
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`SAXENA WHITE P.A.
`David R. Kaplan (SBN 230144)
`Wolfram T. Worms (SBN 202889)
`12750 High Bluff Drive, Suite 475
`San Diego, CA 92130
`Telephone:
`(858) 997-0860
`Facsimile:
`(858) 369-0096
`Email: dkaplan@saxenawhite.com
`wworms@saxenawhite.com
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`Counsel for Plaintiff
`Plymouth County Retirement Association
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`PLYMOUTH COUNTY RETIREMENT
`ASSOCIATION, Individually and on Behalf
`of All Others Similarly Situated,
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` Plaintiff,
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` vs.
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`OUTSET MEDICAL, INC., LESLIE TRIGG,
`NABEEL AHMED, and REBECCA
`CHAMBERS,
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` Defendants.
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`Case No.:
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`CLASS ACTION COMPLAINT FOR
`VIOLATIONS OF THE FEDERAL
`SECURITIES LAWS
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`DEMAND FOR JURY TRIAL
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 2 of 25
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`Plaintiff, Plymouth County Retirement Association (“Plaintiff”), by and through its
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`attorneys, alleges the following upon information and belief, except as to allegations concerning
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`Plaintiff, which are alleged upon personal knowledge. Plaintiff’s information and belief are based
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`upon, among other things, its counsel’s investigation, which includes, without limitation:
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`(a) review and analysis of public filings made by Outset Medical, Inc. (“Outset Medical” or the
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`“Company”) with the U.S. Securities and Exchange Commission (the “SEC”); (b) review and
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`analysis of press releases and other publications disseminated by Defendants (defined below) and
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`other parties; (c) review of news articles, shareholder communications, conference calls, and
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`postings on Outset Medical’s website concerning the Company’s public statements; and (d) review
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`of other publicly available information concerning the Company and the Individual Defendants
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`(defined below).
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`NATURE OF THE ACTION
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`1.
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`This is a federal securities class action on behalf of all persons or entities who
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`purchased Outset Medical common stock between September 15, 2020, and June 13, 2022,
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`inclusive (the “Class Period”) against Outset Medical and certain of its officers (collectively
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`“Defendants”) seeking to pursue remedies under the Securities Exchange Act of 1934, 15 U.S.C.
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`§ 78a et seq. (the “Exchange Act”).
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`2.
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`Outset Medical is a medical technology company focused on kidney dialysis, the
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`primary treatment for acute and chronic kidney failure. The Company’s flagship product is the
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`Tablo Hemodialysis System (“Tablo”). Tablo is a dialysis machine that purifies tap water and
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`then artificially purifies and removes toxins from the blood of patients suffering from kidney
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`failure.
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`3.
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`Throughout the Class Period, Outset Medical touted that Tablo can “serve as a
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`dialysis clinic on wheels” that had been “cleared by the [U.S.] Food and Drug Administration [(the
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`“FDA”)] for use in the hospital, clinic or home setting.” Indeed, Outset Medical made clear that
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`the Company’s true value proposition would be recognized through the emerging use-at-home
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`market rather than the more traditional acute or clinical settings it targeted historically. Outset
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 3 of 25
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`sought to differentiate itself in the crowded dialysis device market by highlighting its focus on the
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`“home setting, which [the Company] estimate[d] represents a total addressable market opportunity
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`of approximately $8.9 billion.” Outset Medical contended it was “well-positioned” to “help
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`accelerate th[e] shift to home-based hemodialysis therapy” prompted by the COVID-19 pandemic,
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`patient preferences, government initiatives, and reimbursement changes.
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`4.
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`However, devices used by non-professionals outside of a clinical setting and that
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`can present serious health consequences like Tablo are subject to heightened scrutiny by the FDA,
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`including post-market surveillance studies pursuant to Section 522 of the Federal Food, Drug, and
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`Cosmetic Act (the “FDCA”), 21 C.F.R. § 822.1(a). Thus, though cleared by the FDA for sale,
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`Tablo for use in the home setting was subject to additional studies, the results of which could
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`require additional applications for clearance and approvals.
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`5.
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`While performing further regulatory studies during the Class Period, the Company
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`assured investors that it was conducting the studies “in accordance with the FDA approved
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`protocol,” which required an appropriate demonstration of “real-world” human testing given that
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`the device would be used at home by non-professionals.
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`6.
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`Seizing on positive prospects for sales of Tablo, the Company completed two
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`secondary stock offerings—one in December 2020 and one in April 2021—raising more than
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`$570 million in proceeds for the benefit of the Company and its private equity backers.
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`7.
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`Undisclosed to investors, and as Defendants have now admitted, Outset Medical
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`“continuously” made significant changes to Tablo for use in the home setting. The nature of these
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`undisclosed changes: (1) made it likely that the FDA would order the Company to cease all
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`marketing and selling of Tablo for use in the home pending additional applications and approvals;
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`and (2) prevented the Company from performing the requisite “real-world” human testing on a
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`device cleared for sale, contrary to representations to investors.
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`8.
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`Investors began to learn the truth after the markets closed on May 4, 2022, when
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`the Company announced disappointing results for the first quarter of 2022, which analysts
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`attributed, inter alia, to the untested nature of Tablo in the home setting. In response to this
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 4 of 25
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`disclosure, and as the market digested this news, the price of Outset Medical common stock
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`declined more than 40% over the three trading days that followed, from a closing price of $39.94
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`per share on Wednesday, May 4, 2022, to a closing price of $23.06 per share on Monday, May 9,
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`2022.
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`9.
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`Outset Medical then shocked investors after the markets closed on June 13, 2022,
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`announcing that the FDA had forced the Company to hold all shipments of Tablo for use in the
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`home until Tablo received proper regulatory clearance. In an astonishing admission made during
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`an “FDA Review Call” held that day with analysts, Company Chief Executive Officer (“CEO”)
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`Leslie Trigg (“Trigg”) acknowledged the “ship hold” had already been in place for weeks before
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`investors were provided this material information. Importantly, CEO Trigg disclosed for the first
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`time that, rather than conducting studies using “real-world data” gathered in the “home
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`environment” as the Company previously stated was required by the FDA, in reality, Outset
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`Medical had “run with a protocol that involves a simulated use environment at a human factors
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`lab.”
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`10.
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`During the same call, and as a result of the shipment hold, Outset Medical Chief
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`Financial Officer (“CFO”) Nabeel Ahmed announced the Company was “suspending our prior
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`full-year and long-term guidance.”
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`11.
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`On this news, the price of Outset Medical stock fell an additional 34%, from a
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`closing price of $20.41 per share on June 13, 2022, to a closing price of $13.46 per share on June
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`14, 2022.
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`12.
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`Following the FDA Review Call, analysts openly questioned management’s
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`credibility, reporting a difficulty “reconcil[ing] company commentary on the shipment hold.”
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`13.
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`As a result of Defendants’ wrongful acts and omissions, and the precipitous decline
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`in the market value of the Company’s common stock when the truth was disclosed, Plaintiff and
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`other Class members have suffered significant losses and damages.
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`JURISDICTION AND VENUE
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`14.
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`The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange
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`Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17
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`C.F.R. § 240.10b-5).
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`15.
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`This Court has jurisdiction over the subject matter of this action pursuant to
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`28 U.S.C. § 1331, Section 27 of the Exchange Act (15 U.S.C. § 78aa).
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`16. Venue is proper in this Judicial District pursuant to 28 U.S.C. § 1391(b), Section
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`27 of the Exchange Act (15 U.S.C. § 78aa). Substantial acts in furtherance of the alleged fraud or
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`the effects of the fraud have occurred in this Judicial District. Many of the acts and omissions
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`charged herein, including the dissemination of materially false and misleading information to the
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`investing public, and the omission of material information, occurred in substantial part in this
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`Judicial District, as Outset Medical is headquartered in this District.
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`17.
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`In connection with the acts, transactions, and conduct alleged herein, Defendants,
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`directly and indirectly, used the means and instrumentalities of interstate commerce, including the
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`U.S. Mail, interstate telephone communications, and the facilities of a national securities exchange.
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`DIVISIONAL ASSIGNMENT
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`18.
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`Pursuant to Local Rule 3-2(c) and (e), this action should be assigned to the San Jose
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`Division of this Court, as the Company is headquartered in Santa Clara County, California.
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`19.
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`Plaintiff Plymouth County Retirement Association is a public pension system
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`PARTIES
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`organized for the benefit of current and retired municipal and county employees of Plymouth
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`County, Massachusetts. Plaintiff manages approximately $1.2 billion in assets. As set forth in the
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`accompanying certification, incorporated by reference herein, Plaintiff purchased Outset Medical
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`common stock during the Class Period and suffered damages as a result of the federal securities
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`law violations and false and/or misleading statements and/or material omissions alleged herein.
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 6 of 25
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`20.
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`Defendant Outset Medical is incorporated under the laws of Delaware and has its
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`principal executive offices in San Jose, California. Outset Medical’s common stock trades on the
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`Nasdaq Stock Market (the “NASDAQ”) under the ticker symbol “OM.”
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`21.
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`Defendant Leslie Trigg (“Trigg”) has served as Outset Medical’s CEO at all
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`relevant times and was elected as Chair of Outset Medical’s Board of Directors in 2022.
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`22.
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`Defendant Nabeel Ahmed (“Ahmed”) has served as Outset Medical’s CFO since
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`August 2021. Ahmed joined Outset Medical in May 2020 and served as a Vice President and
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`Controller. On July 1, 2021, the Company filed a Current Report on Form 8-K reporting Ahmed
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`had been appointed as the Company’s Interim CFO. In a subsequent Current Report on Form
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`8-K filed with the SEC on August 5, 2021, the Company announced Ahmed had transitioned to
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`the permanent role of CFO, Principal Financial Officer, and Principal Accounting Officer,
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`effective July 30, 2021.
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`23.
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`Defendant Rebecca Chambers (“Chambers”) was Outset Medical’s CFO at all
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`relevant times until July 16, 2021. In a Current Report on Form 8-K filed with the SEC on July 1,
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`2021, the Company announced Chambers notified the Company on June 28, 2021, of her decision
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`to resign from Outset Medical effective July 16, 2021.
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`24.
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`Defendants Trigg, Ahmed, and Chambers
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`(collectively
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`the “Individual
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`Defendants”), because of their positions with the Company, possessed the power and authority to
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`control the contents of the Company’s reports to the SEC, press releases, presentations to securities
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`analysts, money and portfolio managers, and institutional investors, i.e., the market. The
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`Individual Defendants were provided with copies of the Company’s reports and press releases
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`alleged herein to be misleading prior to, or shortly after, their issuance and had the ability and
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`opportunity to prevent their issuance or cause them to be corrected. Because of their positions and
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`access to material non-public information available to them, the Individual Defendants knew that
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`the adverse facts specified herein had not been disclosed to, and were being concealed from, the
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`public and that the positive representations that were being made were then materially false and/or
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`misleading. The Individual Defendants are liable for the false statements pleaded herein.
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 7 of 25
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`The Company and the Individual Defendants are collectively referred to as the
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`“Defendants.”
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`SUBSTANTIVE ALLEGATIONS
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`Background
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`26.
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`Outset Medical was founded in 2003 and is headquartered in San Jose, California.
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`In March 2020, the Company’s sole product, Tablo, received premarket notification and clearance
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`under Section 510(k) of the FDCA, 21 C.F.R. § 807.81(a).
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`The 510(k) program is a marketing clearance process, pursuant to which Outset
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`Medical had permission to market Tablo and demonstrate that it was as safe and effective as
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`another FDA-approved device. Notably, significant modifications affecting the safety and/or
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`efficacy of a device that has previously received 510(k) clearance may necessitate additional
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`510(k) applications and clearances.
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`28.
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`The Company was taken public through an initial public offering (“IPO”) on
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`September 15, 2020, selling 10.29 million shares of common stock to the public at a price of $27
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`per share. The Company’s IPO prospectus, dated September 14, 2020, instructed investors the
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`Company had “regulatory clearances required to market the Tablo Hemodialysis System in the
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`U.S. for use in patients . . . in an acute or chronic care facility.” Moreover, Outset Medical touted
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`that Tablo was “indicated for use in the home.”
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`29.
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`Throughout the Class Period, Outset Medical instructed investors that although the
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`Company had received 510(k) clearance to sell Tablo for home use, the FDA was continuing to
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`scrutinize the safety and efficacy of Tablo’s use in the home setting. For example, in its IPO
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`Prospectus, Outset Medical instructed investors that the FDA had “recently notified [the Company]
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`that the Tablo System is subject to a mandatory post-market surveillance order under Section 522”
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`of the FDCA because Tablo was a device “[the] failure [of which] would be reasonably likely to
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 8 of 25
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`have serious adverse health consequences, and that it is intended to be a life-sustaining or life-
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`supporting device used outside a device user facility.”
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`30.
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`The Company further instructed investors that, in response to the 522 Order, it had
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`submitted a “simulated human factors test protocol to the agency” and that it “previously
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`committed to the FDA to conduct this study as a validation activity while the Tablo 510(k) was
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`under review by the FDA.”
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`31.
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`According to the Company, the FDA essentially rejected the Company’s
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`“simulated human factors test protocol.” Indeed, as Outset Medical disclosed in its 2020 Annual
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`Report on Form 10-K, as filed with the SEC on March 22, 2021, in “late 2020” the FDA “requested
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`additional information and notified us that we will need to conduct a new human factors study
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`encompassing both summative and real-world data to meet the requirements of the 522 Order.”
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`32.
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`In the same Form 10-K, the Company advised investors it had responded to the
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`FDA’s request for additional information in January 2021, and, in March 2021, the FDA “approved
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`our 522 study protocol.” Notably, the Company assured the market it would “conduct the study
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`in accordance with the FDA approved protocol.”
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`Defendants’ Materially False and Misleading Statements
`Issued During the Class Period
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`33.
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`The Class Period begins on September 15, 2020, when Outset Medical completed
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`its IPO. The offering documents supporting the IPO informed investors the FDA had “required
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`that we conduct a human factors study, as well as conduct a detailed analysis of adverse events
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`and complaints from home users.” Further, the Company stated that it continued “to seek
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`opportunities for product improvements and feature enhancements, which will, from time to time,
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`require FDA clearance or approval before commercial launch.”
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`34.
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`On November 11, 2020, the Company released its financial results for the third
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`quarter of 2020. During the accompanying call with analysts that day, CEO Trigg stated the
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`Company had “carefully and deliberately begun building the foundation for our technology [and
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`that] [w]e’re really excited about the promise of Tablo in transforming the [home hemodialysis]
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 9 of 25
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`market.” CEO Trigg summarized the progress the Company had made in 2020 by, among other
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`things, “secur[ing] FDA clearance for [home hemodialysis].”
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`35.
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`In a conference call with analysts accompanying the Company’s earnings for the
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`fourth quarter of 2020 ended December 31, 2020, CEO Trigg declared “we remain intentionally
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`deliberate in our strategy to expand our home market presence.” Trigg continued, stating the
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`Company remained “committed to doing it well[,] not quickly. Because our go[-]slow to go[-]fast
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`strategy, we expect home revenue to remain modest relative to total revenue in 2021.”
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`36.
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`The Company filed its first Annual Report on Form 10-K with the SEC on March
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`22, 2021. Therein, the Company disclosed that the FDA:
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`has required we conduct a human factors study, as well as conduct
`a detailed analysis of adverse events and complaints from home
`users. In response to the 522 order, we submitted a simulated human
`factors test protocol to the agency which leveraged testing from our
`validation study that was initialed in 2019. In late 2020, the FDA
`requested additional information and notified us that we will need
`to conduct a new human factors study encompassing both
`summative and real-world data to meet the requirements of the 522
`Order. We responded to the FDA’s request for additional
`information in January 2021 and in March 2021, the FDA approved
`our 522 study protocol. We will conduct the study in accordance
`with the FDA approved protocol.
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`37.
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`In a Form S-1 Registration Statement filed on April 6, 2021, in connection with the
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`April 2021 secondary offering of stock, the Company repeated this disclosure, and again assured
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`investors the Company would “conduct the study in accordance with the FDA approved protocol.”
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`38.
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`Defendants continued to give the market the impression testing data from users at
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`home was positive. For example, on May 5, 2021, Outset Medical issued a press release
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`announcing its financial results for the first quarter of 2021. During the accompanying call with
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`analysts that day, CEO Trigg proclaimed that “Tablo’s value proposition at home will become
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`increasingly tangible. To date, patient data from those at home remains exceptional.”
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`39.
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`The Company did not provide investors with another update on the status of the
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`FDA-required human factors study again until the Company filed its 2021 Annual Report on Form
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 10 of 25
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`10-K with the SEC on February 23, 2022 (the “2021 Form 10-K”). After the Company again
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`discussed the FDA’s requirement for a human factors study, the Company reported for the first
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`time that “[w]e have made certain changes over time, including software updates, to the Tablo
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`System, including to accommodate patient use in the home. Although we originally documented
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`these changes in memoranda to file, we have submitted a ‘catch-up’ 510(k) application to the FDA
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`which covers these design changes.”
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`40.
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`The Company’s 2021 Form 10-K further explained that the Tablo System that
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`included these design changes “also is the version of the Tablo System and software that we plan
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`to use in the human factors study, we intend to initiate the human factors study upon FDA
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`clearance. Once we are able to commence, conduct and complete our study, a final report will be
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`provided to the FDA.”
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`41.
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`The above statements identified in ¶¶ 33 - 40 were materially false and/or
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`misleading and failed to disclose material adverse factors about the Company’s business,
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`operations, and prospects, which were known to Defendants or recklessly disregarded by them.
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`Specifically, Defendants misled investors and/or failed to disclose that: (1) Defendants had
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`“continuously made improvements and updates to Tablo over time since its original clearance”
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`that required an additional 510(k) application; (2) as a result, the Company could not conduct a
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`human factors study on a cleared device in accordance with FDA protocols; (3) the Company’s
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`inability to conduct the human factors study subjected the Company to the likelihood of the FDA
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`imposing a “shipment hold” and marketing suspension, leaving the Company unable to sell Tablo
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`for home use; and (4) as a result, Defendants’ positive statements about the Company’s business,
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`operations, and prospects were materially false and misleading and /or lacked a reasonable basis
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`at all relevant times.
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`The Truth Is Revealed
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`42.
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`On May 4, 2022, after the markets closed, the Company released its results for the
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`first quarter of 2022 ended on March 31, 2022, announcing a net loss of $36.9 million in the first
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`quarter alone—an increase over its loss for the same quarter in 2021.
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 11 of 25
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`43.
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`Nevertheless, the Company noted that it “[s]hipped record number of Tablo
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`consoles for Home patients, reflecting continued momentum in health care providers establishing
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`Home programs.” Indeed, during the accompanying conference call with analysts, CFO Ahmed
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`provided increased guidance for full year 2022. Pointing to “our strong performance in the first
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`quarter,” the Company’s “forward visibility, and “increased conviction in our ability to execute as
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`we plan to in 2022,” Ahmed reported increased revenue guidance—from $142 million to
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`$144 million—for the lower end of the Company’s full-year 2022 guidance. Ahmed further touted
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`how the Company’s “performance in the home means that we continue to be on track to deliver
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`home revenues of roughly mid-teens as a percent of full year 2022 revenues.”
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`44.
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`Analysts following the Company noted Tablo’s at-home market was a factor in
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`Outset Medical’s reported loss. For example, in a research report published on May 5, 2022,
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`Oppenheimer & Co. Inc. analyst Suraj Kalia (“Kalia”) rated the Company neutral partially based
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`on “Tablo’s reliability in [the] home setting [being] unproven.”
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`45.
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`As the market digested the Company’s reported loss and analysts’ commentary, the
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`price of Outset Medical stock declined more than 40% over the following three trading days, from
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`a closing price of $39.94 per share on May 4, 2022, to a closing price of $23.06 per share on May
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`9, 2022.
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`46.
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`Then, after the markets closed on June 13, 2022, the Company issued a current
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`Report on Form 8-K that attached a press release announcing the Company “has implemented a
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`shipment hold on the distribution of its Tablo Hemodialysis System for home use pending the Food
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`and Drug Administration (FDA) review of and clearance of a 510(k) the company submitted for
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`changes made since the device’s original March 2020 clearance.”
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`47.
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`The same day, the Company held an emergency “FDA Review Call” with analysts.
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`During the call, CEO Trigg stunned investors by reporting the Company had implemented the ship
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`hold “in late May” which meant the Company would “not be marketing [Tablo] for home use
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`during the shipment hold period.” Unsurprisingly, Defendants acknowledged the hold would
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`“materially impact[] our ability to meet our Q2 forecast.” CEO Trigg then revealed to investors
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 12 of 25
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`that the Company had “continuously made improvements and updates to Tablo over time since its
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`original clearances for acute, chronic at home.” Then, and in stark contrast to the Company’s prior
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`assurances to investors that it had been conducting the 522 Study in accordance with FDA
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`protocols requiring presentation of “real-world data” gathered in “the home environment,” CEO
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`Trigg admitted that, in reality, the Company’s human factors study had been “run with a protocol
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`that involves a simulated use environment at a human factors lab.”
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`48.
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`As a result of the shipment hold imposed by the FDA, CFO Ahmed told analysts
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`during the FDA Review Call that it was “too early to provide guidance for the full year absent
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`clarity on the timing of the review completion,” and as a result, the Company was “suspending our
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`prior full year and longer-term guidance.”
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`49.
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`Following the call, analysts were quick to react to these developments. Analysts
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`with Stifel Financial and Cowen Inc. both slashed their price targets for Outset Medical by roughly
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`40%. Stifel analysts Rick Wise, Anton Heldman, and John McAulay directly tied the Company’s
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`disclosures to the stock price decline, reporting “we expect OM shares will weaken further today
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`reflecting these FDA uncertainties and now-lowered near-term outlook.” Oppenheimer analyst
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`Kalia was even more direct, questioning Defendants’ credibility and reporting “[w]e cannot
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`reconcile company commentary with our understanding of [human factors] testing … and bullish
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`commentary on 1Q call in early May.” Kalia further noted that “[t]he necessity of a shipment hold
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`for [what had been painted by the Company as] relatively marginal design changes doesn’t
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`comport, in our view.”
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`50.
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`In response to this news, on the following trading day, the price of Outset Medical
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`collapsed, falling an additional 34% from a closing price of $20.41 per share on June 13, 2022, to
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`a closing price of $13.46 per share on June 14, 2022.
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`CLASS ACTION ALLEGATIONS
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`51.
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`Plaintiff brings this action as a class action pursuant to Rule 23(a) and (b)(3) of the
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`Federal Rules of Civil Procedure on behalf of a class, consisting of all persons and entities that
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`purchased Outset Medical common stock between September 15, 2020, and June 13, 2022,
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 13 of 25
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`inclusive, and who were damaged thereby (the “Class”). Excluded from the Class are Defendants,
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`the officers and directors of the Company, at all relevant times, members of their immediate
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`families and their legal representatives, heirs, successors, or assigns, and any entity in which
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`Defendants have or had a controlling interest.
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`52.
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`The members of the Class are so numerous that joinder of all members is
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`impracticable. While the exact number of Class members is unknown to Plaintiff at this time and
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`can only be ascertained through appropriate discovery, Plaintiff believes that there are at least
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`hundreds or thousands of members in the proposed Class. Throughout the Class Period, Outset
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`Medical common stock actively traded on NASDAQ (an open and efficient market) under the
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`symbol “OM.” Millions of Outset Medical shares were traded publicly during the Class Period on
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`the NASDAQ. As of April 22, 2022, the Company had more than 47 million shares
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`outstanding. Record owners and other members of the Class may be identified from records
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`maintained by Outset Medical or its transfer agent and may be notified of the pendency of this
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`action by mail, using a form of notice similar to that customarily used in securities class actions.
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`53.
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`Plaintiff’s claims are typical of the claims of the other members of the Class as all
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`members of the Class were similarly affected by Defendants’ wrongful conduct in violation of
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`federal law that is complained of herein.
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`54.
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`Plaintiff will fairly and adequately protect the interests of the members of the Class
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`and has retained counsel competent and experienced in class and securities litigation. Plaintiff has
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`no interests that conflict with those of the Class.
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`55.
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`Common questions of law and fact exist as to all members of the Class and
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`predominate over any questions solely affecting individual members of the Class. Among the
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`questions of law and fact common to the Class are:
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`a.
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`whether Defendants violated the Exchange Act by the acts and omissions
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`as alleged herein;
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`b.
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`whether Defendants knew or recklessly disregarded that their statements
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`and/or omissions were false and misleading;
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`CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-04016-JSC Document 1 Filed 07/08/22 Page 14 of 25
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`c.
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`whether documents, press releases, and other statements disseminated to the
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`investing public and the Company’s shareholders during the Class Period misrepresented material
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`facts about the business, operations, and prospects of Outset Medical;
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`d.
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`whether statements made by Defendants to the investing public during the
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`Class Period misrepresented and/or omitted to disclose material facts about the business,
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`operations, and prospects of Outset Medical;
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`e.
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`whether the market price of Outset Medical common stock during the Class
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`Period was artificially inflated due to the material misrepresentations and failures to correct the
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`material misrepresentations complained of herein; and
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`f.
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`the extent to which the members of the Class have sustained damages and
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`the proper measure of damages.
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`56.
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`A class action is superior to all other available methods for the fair and efficient
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`adjudication of this controversy since joinder of all members is impracticable. Furthermore, as
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`the damages suffered by individual Class members may be relatively small, the expense and
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`burden of individual litigation make it impossible for m