A new class-action lawsuit against Medtronic alleges that problems within the company's diabetes division hurt its stock price and, in turn, its shareholders.
The suit claims Medtronic misled investors about the health of its diabetes business and prospects for future approval from the U.S. Food and Drug Administration for the MiniMed 780G device, its next-generation insulin pump.
Pennsylvania-based law firm Kessler Topaz Meltzer & Check announced the litigation on Thursday.
"During the class period, Medtronic repeatedly assured investors that the MiniMed 780G model was 'on track' for approval by the [FDA] and would provide Medtronic with the edge it needed to close a growing gap with its competitors in the diabetes market," the firm said in its announcement.
The law firm is inviting anyone who bought Medtronic stock between June 8, 2019, and May 25, 2022 to join the suit.
Medtronic spokeswoman Erika Winkels said Friday the company had been made aware of the lawsuit but had not been served or reviewed the complaint.
Last December, the company disclosed receiving a warning letter from the FDA outlining concerns about how the diabetes division had handled complaints, assessed product risks and dealt with recalls.
The company lowered its financial guidance for the diabetes group that same day, sending Medtronic's stock down 6%.
The warning letter also cast a pall of uncertainty over the FDA approval prospects for the MiniMed 780G.
In the company's most recent quarterly conference call with analysts last month, Medtronic chief executive Geoff Martha said the company was close to resolving issues with the FDA.
"We're making good progress on our warning letter commitments," Martha said, "We've completed more than 90% of the actions we committed to the FDA."
