Chembio Diagnostics, Inc. Class Action Lawsuit
- Company Name
- Chembio Diagnostics, Inc.
- Stock Symbol
- Class Period
- April 1, 2020 to June 16, 2020
- Eastern District of New York
The Chembio Diagnostics, Inc. class action lawsuit charges Chembio and certain of its officers and/or directors with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Chembio common stock between April 1, 2020 and June 16, 2020, inclusive (the “Class Period”). The Chembio class action lawsuit was commenced on June 18, 2020 in the Eastern District of New York and is captioned Chernysh v. Chembio Diagnostics, Inc., No. 20-cv-02706.
Chembio purports to be a leading point-of-care (“POC”) diagnostics company focused on detecting and diagnosing infectious diseases. Chembio claims its patented Dual Path Platform (“DPP”), which uses a small drop of blood from the fingertip, provides high-quality, cost-effective test results in approximately 15 minutes.
Throughout the Class Period, defendants represented that Chembio’s DPP COVID-19 serological POC test for the detection of IgM and IgG antibodies aided in determining current or past exposure to the COVID-19 virus, that the test provided high sensitivity and specificity, and that the test was 100% accurate. However, as the Chembio class action lawsuit alleges, the defendants made false and/or misleading statements and/or failed to disclose that Chembio’s DPP COVID-19 test did not provide high-quality results and that there were material performance concerns with the accuracy of Chembio’s DPP COVID-19 test.
On June 16, 2020, the FDA issued a press release disclosing that it had revoked Chembio’s Emergency Use Authorization (“EUA”) for Chembio’s DPP COVID-19 IgM/IgG System “due to performance concerns with the accuracy of the test.” Specifically, as set forth in the FDA’s June 16, 2020 letter to Chembio, Chembio’s DPP COVID-19 test was generating a higher than expected rate of false results and higher than that reflected in the authorized labeling for the device and was not effective in detecting antibodies against SARS-CoV-2. Indeed, the FDA determined that based on the data Chembio submitted in support of its EUA, it was not reasonable to believe that the test would be effective in detecting antibodies against SARS-CoV-2 and that, as a result, there was a material risk to the public’s health from the false test results. On this news, the price of Chembio stock declined more than 60%.
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