BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Catalent, Inc. (“Catalent” or the “Company”) (NYSE: CTLT) securities between August 30, 2021 and October 31, 2022, inclusive (the “Class Period”). Catalent investors have until April 25, 2023 to file a lead plaintiff motion.
Investors suffering losses on their Catalent investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to firstname.lastname@example.org.
On August 29, 2022, Catalent disclosed that demand for its COVID-related products was facing substantial headwinds. On this news, Catalent’s stock price fell $7.42, or 7.4%, to close at $92.28 per share on August 29, 2022, thereby injuring investors.
Then, on September 20, 2022, The Washington Post reported that the release of Catalent’s COVID vaccines had been delayed due to improper sterilization at one of the Company’s key facilities. On this news, Catalent’s stock price fell $8.09, or 9.3%, over the next two consecutive trading days to close at $79.06 per share on September 22, 2022.
Then, on November 1, 2022, Catalent disclosed regulatory issues at its key facilities that were negatively impacting its financial results, revealing that the Company’s quarterly earnings had declined to zero. On this news, Catalent’s stock price fell $20.83, or 31.7%, over two trading days to close at $44.90 per share on November 2, 2022.
Then, on November 16, 2022, Catalent revealed that it was carrying approximately $400 million in excess inventory. On this news, Catalent’s stock price fell $6.84, or 14%, over two trading days to close at $42.07 per share on November 17, 2022.
Then, on December 8, 2022, GlassHouse Research published a report alleging that Catalent had been overstating its revenues by $568.2 million in violation of GAAP. The report detailed the rapid increase in Catalent’s contract asset and inventory balances, declining customer deposits, executive turnover, and recent scrutiny of the Company’s revenue accounting. On this news, Catalent’s stock price fell $1.68, or 3.6%, to close at $45.54 per share on December 8, 2022, thereby injuring investors further.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Catalent materially overstated its revenue and earnings by prematurely recognizing revenue in violation of U.S. Generally Accepted Accounting Principles; (2) Catalent had material weaknesses in its internal control over financial reporting related to revenue recognition; (3) Catalent falsely represented demand for its products while it knowingly sold more product to its direct customers than could be sold to healthcare providers and end consumers; (4) Catalent disregarded regulatory rules at key production facilities in order to rapidly 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; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
If you purchased Catalent securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to email@example.com, or visit our website at www.howardsmithlaw.com.
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