Company: AxoGen, Inc.
A shareholder class action lawsuit has been filed against AxoGen, Inc. (“AxoGen” or the “Company”) (NASDAQ: AXGN) on behalf of investors who purchased shares of the Company’s stock between August 7, 2017 and December 18, 2018, inclusive (the “Class Period”).
On December 18, 2018, Seligman Investments published a report stating, among other things, that former employees allege channel stuffing and backdating of revenue, that the Company’s number of active accounts may be overstated by a factor of ten, that the Company’s “growth [i]s driven by unsustainable, aggressive price increases,” and that the payments to physicians relative to revenue creates “elevated risks relating to pay-to-play and anti-kickback laws.” Following this news, shares of the Company’s stock fell $6.17 per share, or nearly 22%, to close at $21.36 per share on December 18, 2018, on unusually high trading volume. Over the following three trading days, shares of the Company’s stock declined an additional $4.27 per share.
Among other things, the shareholder class action lawsuit alleges that AxoGen made materially false and misleading statements to investors during the Class Period and/or failed to disclose that: (i) the Company aggressively increased prices to mask lower sales; (ii) the Company’s pricing alienated customers and threatened the Company’s future growth; (iii) the Company was dependent on a small number of surgeons whom the Company paid to generate sales; (iv) the Company offered purchase incentives to sales representatives to encourage channel stuffing; (v) the Company’s sales representatives were encouraged to backdate revenue to artificially inflate metrics; and (vi) the Company’s key operating metrics, such as number of active accounts, were overstated.
AxoGen stockholders who purchased shares of the Company’s stock prior to December 18, 2018 are encouraged to contact the firm to discuss their legal rights and potential recovery options.