RADNOR, Pa., Aug. 7, 2020 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP alerts investors that a securities fraud class action lawsuit has been filed against Chembio Diagnostics, Inc. (NASDAQ: CEMI) ("Chembio") on behalf of those who purchased or otherwise acquired Chembio common stock between March 12, 2020 and June 16, 2020, inclusive (the "Class Period").
Investors who purchased or otherwise acquired Chembio common stock during the Class Period may, no later than August 17, 2020, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please click https://www.ktmc.com/chembio-diagnostics-inc-class-action?utm_source=PR&utm_medium=link&utm_campaign=chembio.
According to the complaint, Chembio develops diagnostic solutions and offers products for treatment, detection, and diagnosis of infectious diseases. Chembio claims to have developed and patented a new and innovative technology called the Dual Path Platform ("DPP®"), which allows for rapid diagnostic testing of a variety of chemical substances. On its website, Chembio maintains that its products "meet the highest standards for accuracy and superior performance to help prevent the spread of infectious diseases" and that its "innovative solutions, like the Chembio Dual Path Platform (DPP®), make [point-of-care] testing faster, more accurate, and more cost effective."
On March 12, 2020, Chembio entered into a worldwide strategic partnership with LumiraDx Limited, a company focused on developing, manufacturing, and commercializing industry-leading point-of-care diagnostic platforms, with the aim of developing a diagnostic test for the detection of the COVID-19 virus and IgM and IgG antibodies on both of their DPP® platforms (the "DPP COVID-19 Test"). Following this news, Chembio's shares jumped 65% during pre-market trading. Throughout the Class Period, the defendants touted their progress in developing the DPP COVID-19 Test, representing that it: (i) successfully aided in determining current or past exposure to the COVID-19 virus; (ii) provided high sensitivity and specificity; and (iii) was 100% accurate. The defendants' overly positive progress updates convinced some entities to place purchase orders for the DPP COVID-19 Tests worth millions of dollars. These events further boosted the price of Chembio shares, including on March 20, 2020, when Chembio's shares rose 54%. Chembio's representations ultimately drove its stock from a closing price of $3.10 per share on March 11, 2020, to a Class Period high of $15.54 per share on April 24, 2020, an increase of more than 400%.
The complaint alleges that, on June 16, 2020, after the market closed, the U.S. Food and Drug Administration ("FDA") issued a press release disclosing that it had revoked Chembio's Emergency Use Authorization ("EUA") for its DPP COVID-19 Test. In a public announcement, the FDA informed that its decision was "due to performance concerns with the accuracy of the test." More specifically, the FDA informed that the DPP COVID-19 Test "generate[d] a higher than expected rate of false results and higher than that reflected in the authorized labeling for the device." As a result, the FDA concluded that the "test's benefits no longer outweigh its risks." The next day, on June 17, 2020, Chembio publicly acknowledged the receipt of the FDA's June 16, 2020 letter and informed the public of the FDA's revocation of its EUA. Following this news, Chembio shares declined from a closing price on June 16, 2020 of $9.93 per share to close at $3.89 per share on June 17, 2020, a decline of more than 60%.
The complaint alleges that throughout the Class Period, 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 there were material performance concerns with the accuracy of its DPP COVID-19 Test.
Chembio investors who wish to discuss this securities fraud class action lawsuit and their legal options are encouraged to contact Kessler Topaz Meltzer & Check, LLP (James Maro, Jr., Esq. or Adrienne Bell, Esq.) at (844) 877-9500 (toll free) or at [email protected].
Chembio investors may, no later than August 17, 2020, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a 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 affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check. For more information about Kessler Topaz Meltzer & Check, please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 877-9500 (toll free)
SOURCE Kessler Topaz Meltzer & Check, LLP