| COMPANY |
DENTSPLY SIRONA Inc. |
| COURT |
United States District Court for the Southern District of New York |
| CASE NUMBER |
24-cv-09083 |
| JUDGE |
The Hon. Naomi Reice Buchwald |
| CLASS PERIOD |
May 6, 2021, through November 6, 2024 |
| SECURITY TYPE |
Common Stock |
LEAD PLAINTIFF DEADLINE IS JANUARY 27, 2025.
If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.
Case Background
Prior to the start of the Class Period, on December 31, 2020, DENTSPLY paid $1.04 billion in cash to acquire Byte, a manufacturer of clear dental aligners.
The Class Period begins on May 6, 2021, when DENTSPLY held a conference call to discuss financial results for the first quarter of 2021. During the call, DENTSPLY’s CEO spoke on the company’s reasoning behind the acquisition of Byte, stating that Byte had “a really, really good product.” DENTSPLY’s CEO continued, “They had a great team and culture out there that was very customer focused, and we remain very, very customer focused in terms of those reviews. Literally, something we look at as a team on an hourly and nightly basis.” DENTSPLY’s CEO also stated that it was important to DENTSPLY to “maintain high Net Promoter Scores,” a market research metric that measures, in part, customer satisfaction.
On February 28, 2022, DENTSPLY hosted an earnings call associated with the release of its fourth quarter 2021 financial results. During the call, DENTSPLY’s CEO trumpeted the strong demand for the company’s digital dentistry products, which he attributed to the clear aligner products such as Byte. During the same call, he also stated that the Byte acquisition “provided important scale to our clear aligner business” and that “[c]lear aligners are an essential part of our digital strategy and increase our exposure to one of the fastest-growing areas in dentistry.”
On October 24, 2024, DENTSPLY partially revealed the truth when it announced the "voluntary suspension of sales and marketing of its Byte Aligners and Impression Kits while the Company conducts a review of certain regulatory requirements related to these products." The same day, in a filing with the SEC, DENTSPLY claimed that the suspension of Byte sales and marketing was a "precautionary measure", while disclosing that it "expects to record non-cash charges for the impairment of goodwill within the range of $450-$550 million" for its Orthodontic and Implant Solutions segment, with the decline in fair value for the Orthodontic Aligner Solutions reporting unit "driven primarily by adverse impacts from recent state regulatory trends pertaining to the Company's direct-to-consumer aligner business." On this news, DENTSPLY's stock price fell $1.10 per share, or more than 4%, to close at $23.31 per share on October 25, 2024.
Then, on November 7, 2024, DENTSPLY reported its financial results for the third quarter of 2024 and shocked the market when it disclosed that the company had "recorded a non-cash charge for the impairment of goodwill of ($495) million net of tax within the Orthodontic and Implant Solutions segment" and had revised its 2024 outlook. On a subsequent conference call to discuss these results, DENTSPLY's CEO disclosed that the company was considering the "discontinuation of some or all of [Byte's] business." On this news, DENTSPLY's stock price fell $6.72 per share, or more than 28%, to close at $17.26 per share on November 7, 2024.
The complaints allege that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) DENTSPLY targeted low-income people who did not have access to good oral hygiene education, a dentist, or dental insurance, which often meant patients signing up for Byte, a direct-to-consumer aligner solution, had underlying dental issues that would have made them ineligible for treatment; (2) the push for Byte growth and sales commissions caused sales employees to sell to contraindicated patients; (3) as a result of the above, the Byte patient onboarding workflow did not provide adequate assurance that contraindicated patients did not enter treatment; (4) before and during the Class Period, reports of Byte patient injuries were pouring in; (5) DENTSPLY knew that its Byte aligners were causing severe patient injuries for years but did little to investigate those injuries or notify the FDA; (6) DENTSPLY had no systems in place to notify the FDA of these injuries, which Dentsply is required to do within 30 days of learning of a problem; (7) the FDA had received a sharp uptick in reports of serious injuries from Byte patients; (8) as a result of the above, DENTSPLY materially overstated the goodwill value of Byte; and (9) as a result of the above, Defendants’ positive statements about DENTSPLY’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
What is a Lead Plaintiff?
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.