Skip to Main Content

Organogenesis Holdings Inc. Securities Fraud Class Action

COMPANY         Organogenesis Holdings Inc.
COURT United States District Court for the Eastern District of New York
CASE NUMBER 21-cv-06845
JUDGE The Honorable Diane Gujarati
CLASS PERIOD July 22, 2020 - October 21, 2021
SECURITY TYPE  Securities

Case Background:

This securities fraud class action case arises out of Defendants’ false or misleading statements and omissions of material fact regarding Organogenesis’s revenue growth between August 10, 2020 and August 9, 2022. Organogenesis primarily manufacturers and sells skin substitute products used in the treatment of chronic and acute wounds. During the Class Period, Plaintiffs allege that Organogenesis and Defendants Gillheeney and Francisco, the Company’s Chief Executive Office and Chief Financial Officer, respectively, engaged in a scheme to game the Medicare reimbursement system for two of Organogenesis’s skin substitute products—Affinity and PuraPly XT—to boost revenues and inflate the Company’s stock price. Defendants’ scheme centered on illegal marketing efforts that sought to induce physicians to purchase Affinity and PuraPly XT over competing products by marketing the difference, or “spread” between the amount Organogenesis charged physicians for these products and the amount physicians were reimbursed by certain Medicare Administrative Contractors (“MAC”). Plaintiffs further allege that Defendant Gillheeney personally profited from Defendants’ scheme by selling $16.8 million of Organogenesis common stock during the Class Period while the Company’s stock price was inflated as a result of Defendants’ misstatements and omissions.

Defendants’ scheme gradually unraveled beginning on October 12, 2021, when a market analyst issued a report alleging that Organogenesis’s rapid growth was the result of Defendants’ undisclosed marketing of the Medicare reimbursement “spread” for Affinity and PuraPly XT–i.e., the difference between the price paid by a physician and the amount reimbursed by Medicare. This disclosure caused Organogenesis’s stock price to decline approximately 14%. Defendants, however, continued to mislead the market and reassure investors that Organogenesis’s revenue growth was genuine and sustainable.

Defendants’ scheme was thwarted when Medicare set a national Average Selling Price (”ASP”) for Affinity that was significantly lower than the amount physicians were reimbursed by the MACs, leading to a rapid decline in Affinity sales. On August 9, 2022, Organogenesis announced its second quarter 2022 financial results, which disclosed that Affinity sales had declined substantially as a result of the recently established ASP. Following this revelation, Organogenesis’s stock price declined 20%.

Current Status of Case:

On October 24, 2022, Lead Plaintiffs filed an Amended Complaint. On March 13, 2023, Defendants filed a Motion to Dismiss. Briefing on that Motion is complete and pending before the Court.  This action is ongoing. 

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP:  Jon Naji, Esq. (484) 270-1453; toll-free at (844) 887-9500; or via e-mail at info@ktmc.com.  If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.

Please complete this form relating to your transactions for Organogenesis Holdings Inc. (NASDAQ: ORGO) securities between March 17, 2021 and October 11, 2021, both dates inclusive (the “Class Period”).

You may also contact Jon Naji, Esq. (484) 270-1453; or toll free at (844) 887-9500; or you may submit your information via email at info@ktmc.com; or you may click here to print a PDF of this form.

SUBMIT YOUR INFORMATION
* Denotes required field
Date
# of Shares
Price per Share
Date
Principal Amount
Amount Paid
Series or CUSIP
Date
# of Contracts
Price per Contract
Exercise Price
Expiration Date
Did you purchase shares of Organogenesis Holdings Inc. prior to the Class Period?
Are you a current or former employee of Organogenesis Holdings Inc.?
The submission of this form does not create an attorney-client relationship, nor an obligation on the part of Kessler Topaz or you to file a lead plaintiff motion in this matter. Any information you submit will be maintained as confidential. If Kessler Topaz, in its sole discretion, believes that you might be an appropriate lead plaintiff candidate, Kessler Topaz will contact you to discuss the matter and whether to establish an attorney client relationship. By signing this form you are authorizing us to contact you regarding this case and/or future cases.
I agree to the KTMC disclaimer
I would like to receive new case alerts by email