||Industriens Pensionsforsikring A/S v. Becton, Dickinson and Company, et al.
||United States District Court for the District of New Jersey
||Honorable Stanley R. Chesler and Honorable Cathy L. Waldor
||Industriens Pensionsforsikring A/S (“Industriens”)
||Becton, Dickinson and Company, Vincent A. Forlenza, Thomas E. Polen, and Christopher R. Reidy
||November 5, 2019 through February 5, 2020, inclusive
This securities fraud class action arises out of Becton’s alleged misrepresentations concerning its ability to market one of its key products—the Alaris infusion pump system (“Alaris”)—in 2020.
For years, Alaris has been an important revenue driver for Becton, accounting for hundreds of millions of dollars in annual sales, and the cornerstone product of its main Becton Medical segment. Beginning in November 2019, Defendants stopped shipping Alaris, explaining to investors that the pause related to mere software “upgrades,” would quickly resolve, and would simply push Alaris sales into the final three quarters of Becton’s fiscal 2020, allowing for strong Company-wide 2020 earnings growth. In reality, however, the problems with Alaris were much more severe than Defendants let on, as the product had been beset with undisclosed defects, safety and compliance issues, and unremediated regulatory failures for months, and in some cases, years, prior to late 2019. When Defendants revealed the full sweep of these issues in February 2020, and the fact that Alaris would be pulled from the market for an indefinite number of months—causing earnings guidance for 2020 to be slashed—Becton’s stock price dropped over $33.00 in a single day of trading.
Industriens filed an amended complaint in February 2021 on behalf of a putative class of investors alleging that Becton and former executive Forlenza, as well as current executives Polen and Reidy, violated Section 10(b) of the Securities Exchange Act by making false and misleading statements about Alaris and the issues the product faced. As alleged, Defendants downplayed and outright misrepresented the severe safety and regulatory problems Becton knew troubled the Alaris product line, and assured investors that Becton was on track to meet its earnings guidance for 2020, anchored by Alaris revenues, through a series of false or misleading statements. Meanwhile, Forlenza and Polen enriched themselves by together selling over $58 million worth of their personally-held shares of Becton stock between November 2019 and February 2020. The February 2020 revelation of the truth about the Alaris issues led directly to the sharp decline in Becton’s stock price noted above, causing significant losses and injury to the Company’s investors.
On September 15, 2021, the Court granted Defendants’ motion to dismiss, but granted Plaintiff leave to amend the amended complaint. On October 29 2021, Plaintiff filed a second amended complaint.