Case Name: Cardinal Health
Settlement Fund: $109,000,000
Claim Filing Deadline: 7/24/2023
Class Period: 3/2/2015 -- 5/2/2018
In 2015, Cardinal Health purchased medical device manufacturer Cordis from Johnson and Johnson for $1.944 billion. Cardinal assured investors that this expensive purchase would pay off by entering them into the high-margin cardiovascular and stent market.
Plaintiffs allege that Cardinal botched this acquisition by not meeting the logistical demands of selling such devices. "Critically, unlike Cardinal’s other medical supply products," plaintiffs wrote in their complaint, "heart stents and
catheters have strict product expiration dates, which must be closely monitored to comply with regulatory and quality standards." Throughout the class period, plaintiffs allege that Cardinal repeatedly told investors that the incorporation of Cordis was an ongoing success, while in practice they were losing track of this costly inventory.
In their complaint, Plaintiffs claim that "Cordis’s inventory and supply chain platforms were so deficient that [Cardinal] lacked visibility into customer demand and existing inventory levels, particularly with respect to products consigned to third-party vendors overseas. As a result, Cordis manufactured and accumulated excessive amounts of cardiovascular product inventories. As the excess inventory sat on the shelf, products became unsellable and/or expired."
On August 2, 2017, Cardinal's rosy reports began to change when the company reported weak earnings due to "higher-than-planned write-offs for excess inventory." Cardinal Health stock fell 8% that day, from $77.33 per share on August 1, to a $70.99 close on August 2. In the coming months, the bad news kept coming, the stock kept falling, and finally on May 3, 2018, Cardinal admitted "unanticipated disappointing performance from our Cordis business." Plaintiffs claim this news "stunned" financial analysts. Investors weren't happy either, and after a sell-off the stock price fell 21%, from $64.65 on May 2, to a close of $50.80 on May 3.
If you have any questions about this litigation or any of the hundreds of other cases for which we are filing claims, then please give us a call at 312-204-6970.
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