|Stockholders are accusing Edwards Lifesciences of misleading the public about sales of its Sapien valve.--Courtesy of Edwards Lifesciences|
Salty investors are taking Edwards Lifesciences ($EW) to court, accusing the company of lying about heart valve sales and misleading stockholders about demand for its Sapien devices.
Back in April, Edwards Lifesciences slashed its full-year sales projections by about 5% "to reflect a slower start to the year," CEO Michael Mussallem said, sending its share price down more than 20%. Now, investors are launching a class-action suit against the company, looping in anyone who owned Edwards stock between April 25, 2012 and April 23, 2013 and demanding monetary damages, interest and legal fees.
According to the complaint, Edwards well knew that physician adoption of the Sapien valve would be sluggish but forecasted sky-high sales to inflate its share price. The company traded as high as $110.79 per share back in October, when it figured to rake in about $790 million from Sapien valves, eventually falling 41% after sobering up its outlook, according to the suit.
Edwards said Thursday that it does not discuss pending litigation.
April's stock plunge was part of a rough spring for the Irvine, CA, company. In May, Edwards launched a $750 million stock buyback to reaffirm investor confidence, with Mussallem tossing in $5 million of his own. That effort pushed its shares up about 14.5% from their April nadir, but a late-May FDA warning letter over problems at the company's Utah facility spooked investors yet again.
Since then, Edwards has a charted a smoother path, winning Japanese approval and reimbursement for the Sapien XT valve and beating out rival Medtronic ($MDT) in a German patent dispute. The company closed at $70.84 on Wednesday, up nearly 10% since April 24.
- read the lawsuit (PDF)