Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors that: a) purchased or otherwise acquired AxoGen, Inc. (AxoGen or the Company) (NASDAQ: AXGN) securities pursuant and/or traceable to the Companys false and/or misleading registration statement and prospectus (collectively, the November 2017 Registration Statement) issued in connection with the Companys November 2017 secondary public offering (November SPO); and/or b) purchased or otherwise acquired AxoGen securities pursuant and/or traceable to the Companys false and/or misleading registration statement and prospectus (collectively, the May 2018 Registration Statement) issued in connection with the Companys May 2018 secondary public offering (May SPO); and/or c) purchased or otherwise acquired AxoGen securities between August 7, 2017 and December 18, 2018, inclusive (the Class Period).
On December 18, 2018, Seligman Investments issued a report stating, among other things, that former employees alleged that the Company engaged in channel stuffing and backdating of revenue, that the number of active accounts may be overstated by a factor of ten, and that aggressive annual price increases had driven the Companys revenue growth.
On this news, the Companys share price fell $6.17 per share, or nearly 22%, to close at $21.36 per share on December 18, 2018, on unusually high trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Companys business, operations, and prospects. Specifically, Defendants failed to disclose: (1) that the Company aggressively increased prices to mask lower sales; (2) that the Companys pricing alienated customers and threatened the Companys future growth; (3) that ambulatory surgery centers form a significant part of the market for the Companys products; (4) that such centers were especially sensitive to price increases; (5) that the Company was dependent on a small number of surgeons whom the Company paid to generate sales; (6) that the Companys consignment model for inventory was reasonably likely to lead to channel stuffing; (7) that the Company offered purchase incentives to sales representatives to encourage channel stuffing; (8) that the Companys sales representatives were encouraged to backdate revenue to artificially inflate metrics; (9) that the Company lacked adequate internal controls to prevent such channel stuffing and backdating of revenue; (10) that the Companys key operating metrics, such as number of active accounts, were overstated; and (11) that, as a result of the foregoing, Defendants positive statements about the Companys business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
If you purchased shares of AxoGen, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to [email protected], or visit our website at www.howardsmithlaw.com.
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