QuidelOrtho Corporation Securities Lawsuit Investigation

Shamis & Gentile P.A., a law firm that advocates for investors who are victims of securities fraud, is investigating potential claims against QuidelOrtho Corporation (QDEL).

If you purchased QuidelOrtho securities and suffered losses, you may be eligible to join this securities investigation and seek compensation.

About QuidelOrtho

QuidelOrtho Corporation, headquartered in San Diego, is a Delaware-incorporated diagnostics company specializing in tests for detecting and diagnosing respiratory diseases and other medical conditions.

In May 2022, Quidel completed its merger with Ortho Clinical Diagnostics Holdings plc, forming QuidelOrtho. During the pandemic, QuidelOrtho generated significant revenue from high-margin COVID-19 tests sold to government entities, healthcare providers, and large retail pharmacy chains.

What's Being Investigated

The investigation focuses on whether QuidelOrtho’s board of directors may have breached their fiduciary duties relating to disclosures and oversight of the company’s respiratory testing business and product pipeline.

According to a filed complaint, investors allege that QuidelOrtho and certain officers and directors made misleading statements or omissions.

The alleged misleading statements or omissions include:

• The volume of COVID-19 tests sold to distributors and pharmacy chains, allegedly exceeding actual market demand.
• The existence of excess COVID-19 test inventory throughout the supply chain.
• The risk that distributors and pharmacy customers would reduce future orders due to overstocking.
• Problems that could delay the commercial launch of the Savanna Respiratory Viral Panel-4 (RVP4) Test in the U.S., which was not FDA-approved during the relevant period.
• The company’s basis for making positive statements about its business outlook, financials, and growth trajectory.

The complaint further alleges that these issues came to light when QuidelOrtho reported disappointing fourth-quarter 2023 results, citing lower COVID-19 revenues due to distributor destocking and reducing its annual endemic COVID-19 revenue forecast.

Key Timeline

• December 23, 2021: Quidel announces agreement to acquire Ortho Clinical Diagnostics. Investors say this marks the beginning of the period under review for governance and integration risks.
• May 26, 2022: Merger with Ortho closes, and QuidelOrtho is formed. Stockholders argue this event is central to the company’s new business strategy and risk profile.
• February 13, 2024: QuidelOrtho reports Q4 2023 results, with adjusted EPS 46% below analysts’ expectations, citing lower COVID-19 revenues and distributor destocking. The company lowers its annual endemic COVID-19 revenue forecast.
• February 21, 2024: CEO Douglas Bryant is terminated, and an interim Office of the CEO is appointed.
• April 2, 2024: QuidelOrtho withdraws its FDA submission for the Savanna RVP4 Test, citing the final dataset not meeting expectations.
• May 2, 2024 — Brian J. Blaser is appointed CEO.

Why Investors May Be Concerned

Investors allege that QuidelOrtho’s board and certain officers may have failed to implement or maintain adequate oversight systems to monitor mission-critical risks.

These allegations include:

• Failing to detect or respond to excess inventory and declining demand for COVID-19 tests.
• Lacking effective board-level controls over product development and regulatory approval processes for key pipeline products like the Savanna RVP4 Test.
• Making public statements that may not have fully reflected internal knowledge of inventory or regulatory challenges.
• Potential conflicts of interest or incentive structures that could have encouraged aggressive sales or shipment practices.

According to the complaint, these alleged governance and oversight lapses could implicate directors’ and officers’ fiduciary duties under Delaware law.

What Investors Can Watch Next

• Future earnings announcements and guidance updates may provide additional information on inventory levels, demand forecasts, and product pipeline progress.
• Any new regulatory filings or disclosures regarding the Savanna RVP4 Test or other pipeline products.
• Court filings or updates in pending securities class actions or derivative lawsuits, if any.
• Announcements of governance changes, committee reports, or board-level reforms.

Your Rights and Next Steps

This is an active investigation into potential breaches of fiduciary duty and related misconduct at QuidelOrtho. If you owned QuidelOrtho stock during the relevant period and suffered losses, you may have certain rights available.

Potential next steps:

• Request inspection of certain corporate records under Delaware law (Section 220) to investigate possible wrongdoing.
• Participate in a stockholder derivative action, which seeks to recover damages or obtain governance reforms on behalf of the company.
• Pursue claims for unjust enrichment or corporate waste if compensation or benefits were awarded based on allegedly misleading information.

To preserve your rights, it is important to act promptly. Delaware law requires that you continuously hold shares through the outcome of any derivative action.

You May Be Entitled to Compensation

Securities investigations are time-sensitive. If you purchased or held QuidelOrtho securities and experienced financial harm, you may be eligible to join this investigation and seek compensation or other remedies.

If you are interested in learning more or participating in the investigation, complete the form below.