Intersect ENT, Inc.
- Company Name
- Intersect ENT, Inc.
- Stock Symbol
- Class Period
- August 1, 2018 to May 6, 2019
- Motion Deadline
- July 14, 2019
- Northern District of California
The complaint charges Intersect and certain of its officers with violations of the Securities Exchange Act of 1934. Intersect is a commercial drug delivery company that develops products for patients with ear, nose and throat conditions. The Company’s PROPEL family of products is used in conjunction with sinus surgery and its SINUVA sinus implant is used to treat patients who have had surgery but still suffer from recurrent sinus obstruction due to polyps.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants failed to disclose that the Company lacked adequate reimbursement representatives to ensure physicians had access to SINUVA, which would result in the Company’s sales force being more focused on ensuring reimbursement and less on driving sales. As a consequence, physicians were less likely to adopt SINUVA due to transaction costs associated with seeking reimbursement and the Company would be forced to increase staffing to address these issues. As a result of this information being withheld from the market, Intersect securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $34 per share.
Then, on May 6, 2019, the Company disclosed a first quarter 2019 loss of $10.8 million and lowered its guidance for the remainder of 2019. The Company also reported that Lisa D. Earnhardt, the Company’s CEO of 11 years, had resigned. On this news, the price of the Company’s stock fell $8.05 per share, or more than 25%, to close at $25.10 per share on May 7, 2019.