Bioventus Inc (NASDAQ:BVS)., a medical device company, has reached a settlement in a class action lawsuit alleging the company failed to disclose certain information regarding its rebate practices and financial prospects. The lawsuit, filed in the Middle District of North Carolina, also claimed that Bioventus did not adequately disclose the sufficiency of its internal controls over financial reporting.
The settlement agreement, which was filed with the court on Monday, includes a payment of $15.25 million by Bioventus and/or its insurers. The company expects that approximately $6.5 million of the settlement amount will be covered by its insurers, subject to ongoing costs and fees.
The settlement, which requires court approval, provides for the dismissal of all claims against the defendants, including Bioventus, without any admission of liability or wrongdoing by any party.
The initial complaint was filed on January 12, 2023, and the lead plaintiff, Wayne County Employees’ Retirement System, was appointed on April 12, 2023. After the defendants' motion to dismiss was partially granted in November 2023, the Securities Act claims were dismissed, but the Exchange Act claims were allowed to proceed into discovery.
This development comes as a significant event for the company and its stakeholders, as it aims to resolve the litigation that has been a point of focus for the past year and a half. It is important to note that forward-looking statements in the SEC filing indicate that there are still risks involved, including the possibility that the court may not approve the settlement or that the company's insurers may not pay the anticipated amount.
Investors and interested parties should be aware that the information in this article is based on a press release statement and that actual results may differ materially from those set forth in the forward-looking statements.
Bioventus has stated that it will not update or review any forward-looking statement unless required by law. The company's SEC filings can be accessed for more detailed information regarding risks and uncertainties.
Bioventus, headquartered in Durham, North Carolina, is incorporated in Delaware and is listed on the Nasdaq Global Select Market under the ticker symbol NASDAQ:BVS.
In other recent news, Bioventus Inc. has made significant changes to its corporate governance structure, transitioning from a staggered board to one where all directors are elected annually. This shift, approved by both the company and its stockholders, is set to be fully implemented by the 2026 annual meeting. The amendment also includes provisions for the removal of directors with or without cause by a majority vote of the company's shareholders.
In addition to these corporate governance modifications, Bioventus reported a strong first quarter in 2024, with a 15% organic revenue growth following a strategic divestiture. The company's revenues for the quarter reached $129 million, marking a 9% year-over-year increase, and adjusted EBITDA rose by 33% to $23 million.
Following this robust performance, Bioventus raised its full-year 2024 financial outlook, anticipating net sales between $535 million and $550 million, adjusted EBITDA from $94 million to $99 million, and adjusted earnings per share ranging from $0.25 to $0.33.
Despite facing CMS pricing headwinds, the company expects high single-digit to double-digit growth in HA revenue for 2024 and plans to further reduce its net leverage ratio and increase EBITDA. These are the latest developments in Bioventus' ongoing efforts to streamline its operations and improve financial performance.
InvestingPro Insights
As Bioventus Inc. navigates through the legal landscape with its recent settlement, investors might be looking at the company's financial health and market performance to gauge future prospects.
According to real-time data from InvestingPro, Bioventus has a market capitalization of $457.01 million and has shown a remarkable 102.0% return over the last year, indicating a strong market performance despite the legal challenges. Moreover, the company has experienced significant growth in its EBITDA, with a 502.26% increase in the last twelve months as of Q1 2024, which may signal underlying operational efficiency improvements.
InvestingPro Tips suggest that Bioventus' net income is expected to grow this year, and the company has seen a substantial return over the last week, month, and three months, with returns of 7.94%, 21.48%, and 57.81% respectively. These metrics could be indicative of a positive investor sentiment following the settlement news. However, it is worth noting that Bioventus is trading at high EBIT and EBITDA valuation multiples and does not pay a dividend to shareholders, which might be a consideration for income-focused investors.
For those interested in a deeper dive into Bioventus' financials and market performance, InvestingPro offers additional insights and tips. By using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking access to a wealth of investment analysis. There are currently 13 more InvestingPro Tips available for Bioventus, which can be found at: https://www.investing.com/pro/BVS
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