INVESTOR ALERT: Edelson Lechtzin LLP is Investigating Securities Fraud Claims on Behalf of Catalent, Inc. (NYSE: CTLT) Shareholders
NEWTOWN, PA, March 16, 2023 — The law firm of Edelson Lechtzin LLP is investigating securities fraud claims on behalf of all purchasers of Catalent, Inc. (“Catalent” or the “Company”) (NYSE: CTLT) common stock between August 30, 2021, and October 31, 2022 (the “Class Period”).
Catalent investors may move the U.S. District Court for the District of New Jersey to appoint them as lead plaintiff, no later than April 25, 2023. Current holders of Catalent stock may pursue corporate governance reforms. Please contact Edelson Lechtzin LLP to discuss your investment losses at 844-696-7492, or by e-mail at [email protected]. A copy of the class action complaint can be viewed HERE.
Background on Catalent, Inc.
Headquartered in Somerset, New Jersey, Catalent is a multinational corporation that leads in enabling pharma, biotech, and consumer health partners to optimize product development, launch, and full life-cycle supply for patients around the world. Catalent sells their products to pharmaceutical companies, which sell them through the supply chain to healthcare providers.
The Securities Fraud Claims
The Complaint alleges that, throughout the Class Period, defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose adverse facts, which were known to them or recklessly disregarded by them, including the following: (i) Catalent materially overstated its revenue and earnings by prematurely recognizing revenue in violation of U.S. Generally Accepted Accounting Principles (“GAAP”); (ii) the Company had material weakness in its internal controls over financial reporting related to revenue recognition; (iii) Catalent falsely represented demand for its products while it knowingly sold more product to its direct consumers than could be sold to healthcare providers and end consumers; and (iv) Catalent disregarded regulatory rules at key production facilities in order to produce excess inventory that was used to pad the Company’s financial results through premature revenue recognition, in violation of GAAP, and/or stuffing its direct customers with this excess inventory. As a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company’s financial performance, outlook, and regulatory compliance during the Class Period.
On August 29, 2022, Catalent’s misrepresentations were first revealed to the market when they disclosed that demand for its COVID-related products were facing substantial headwinds. On this news, Catalent’s stock price declined by 7.4%, to close at $92.28 per share on August 29, 2022,
On September 20, 2022, the Washington Post reported that the release of COVID-19 vaccines produced by Catalent had been delayed by regulators due to improper sterilization at one of Catalent’s key facilities. On this news, Catalent’s stock price declined 9.3% over two trading sessions, to close at $79.06 per share on September 22, 2022.
Catalent announced on November 1, 2022, that its quarterly earnings declined to zero and lowered its financial guidance. The Company also disclosed that regulatory issues at its key facilities were negatively impacting its financial results. On this news, Catalent’s stock price declined by 31.7% over two trading sessions, to close at $44.90 per share on November 2, 2022.
On November 16, 2022, Catalent revealed that it was carrying up to $400 million in excess inventory, further revealing that the Company had misrepresented demand for its products as well as its ability to predict future demand. On this news, Catalent’s stock price declined 8.5%, over two trading sessions, to close at $42.07 per share on November 17, 2022.
On December 8, 2022, GlassHouse Research published a report detailing numerous red flags that were indicative of Catalent’s improper accounting practices. The report also described how Catalent’s direct customers were stuffed with excess inventory which “will take years to unwind.” On this news, Catalent’s stock declined 3.6% to close at $45.54 per share on December 8, 2022.
For more information, please contact:
Marc H. Edelson, Esq.
Eric Lechtzin, Esq.
EDELSON LECHTZIN LLP
411 S. State Street, Suite N-300
Newtown, PA 18940
Email: [email protected]
Email: [email protected]
Edelson Lechtzin LLP is a national class action law firm with offices in Pennsylvania and California. In addition to cases involving securities and investment fraud, our lawyers focus on class and collective litigation in cases alleging violations of the federal antitrust laws, employee benefit plans under ERISA, wage theft and unpaid overtime, consumer fraud, and dangerous and defective drugs and medical devices.