RADNOR, Pa., April 21, 2024 (GLOBE NEWSWIRE) — The law firm of Kessler Topaz Meltzer & Check, LLP informs investors that the firm has filed a securities fraud class action lawsuit against agilon health, inc. (NYSE: AGL) (“agilon” or the “Company”). This action, captioned Hope v. agilon health, inc., et al., Case No. 1:24-cv-00305, was filed in the United States District Court for the Western District of Texas and expanded the class period which was pled in a first-filed case in that same Court. After the Hope action was filed, another case was filed against agilon in another Court, the United States District Court for the Southern District of New York, which even further expanded the class period as pled in the Hope action as that case is brought on behalf of investors who purchased or acquired agilon common stock between April 15, 2021, and February 27, 2024, inclusive (the “Class Period”).
Important Deadline Reminder: The first-filed action in the Western District of Texas issued a notice of its filing pursuant to the federal securities laws which triggered the deadline of May 20, 2024, for any investors who purchased agilon common stock to seek to be appointed as a lead plaintiff representative of the class. The filing of the Hope Action does not change the May 20, 2024, lead plaintiff deadline.
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LEAD PLAINTIFF DEADLINE: MAY 20, 2024
CLASS PERIOD: APRIL 15, 2021, THROUGH FEBRUARY 27, 2024
CONTACT AN ATTORNEY TO DISCUSS YOUR RIGHTS:
Jonathan Naji, Esq. (484) 270-1453 or Email at info@ktmc.com
DEFENDANTS’ MISCONDUCT
agilon is a healthcare and technology company that acts as an intermediary between physician groups that provide medical services to senior citizens and Medicare and Medicare Advantage insurers. One of agilon’s key financial metrics is “medical margin,” which the Company defines as medical services revenue less medical services expenses.
The Class Period begins on April 15, 2021, which is the day after the Registration Statement was declared effective by the SEC and the first day agilon shares were publicly traded in connection with the IPO.
Throughout the Class Period, Defendants repeatedly touted the strength of agilon’s medical margin. Additionally, Defendants downplayed the significant cost pressures on the Company’s medical margin and profitability. For example, on June 7, 2023, just days before other health insurers such as UnitedHealth Group Inc. and Humana Inc. reported significant increases in medical costs, Defendant Bensley, speaking at an analyst-sponsored healthcare conference, reported that Defendants “expect this year to generate somewhere around $550 million of medical margin,” noting that the Company has seen “steady progress on medical margin upwards.”
Investors began to learn the truth about the cost pressures impacting agilon’s medical margin and profitability on November 2, 2023, when the Company announced its third quarter 2023 financial results after the market closed. Critically, agilon reported a net loss of $31 million for the third quarter of 2023 and slashed its fiscal year 2023 medical margin to a range between $455 million and $470 million. Defendant Sell also assured investors that agilon’s more conservative approach to guidance “should reduce the risk of negative claims development next year.” On this news, the price of agilon common stock declined $3.78 per share, or more than 22% over two trading-days, from a close of $16.89 per share on November 2, 2023, to close at $13.11 per share on November 6, 2023.
After several additional disclosures in November 2023, investors more fully learned the truth about the cost pressures on agilon’s medical margin and profitability before the market opened on January 5, 2024, when agilon updated its fiscal year 2023 financial results and provided its initial outlook for 2024. Critically, agilon further slashed its 2023 medical margin guidance more than $100 million, to a range between $340 million and $360 million, due to “higher-than-expected medical costs.” This represented a decline of more than 34% from the $550 million in medical margin it had predicted. On the related investor guidance call, Defendant Sell acknowledged that agilon “failed to recognize these elevated cost trends” and had “a data and analytics gap that led to [the Company] being late in both recognizing the magnitude and source of the utilization shifts.” Defendant Sell further indicated that the increased cost trends were expected to persist through 2024. Also on January 5, 2024, Defendant Bensley announced that he would retire in 2024. On this news, the price of agilon common stock plummeted $3.45 per share, or nearly 29%, from a close of $12.08 per share on January 4, 2024, to close at $8.63 per share on January 5, 2024.
Finally, on February 27, 2024, agilon disclosed that its 2023 medical margin had in fact come in at just $299 million for the year – far lower than the range of $340 million to $360 million provided just a few weeks prior. Furthermore, agilon slashed its 2024 medical margin guidance by 27%. On this news, the price of agilon common stock dropped from $6.48 per share when the market closed on February 27, 2024, to $6.04 per share on March 1, 2024, a 7% decline on abnormally heavy volume of a three-day period. In subsequent days, the price of agilon stock continued to decline, falling to a low of just $5.66 per share on March 6, 2024, more than 85% below the Class Period high.
WHAT CAN I DO?
agilon investors may, no later than May 20, 2024, move the Court to serve as lead plaintiff for the class, through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. Kessler Topaz Meltzer & Check, LLP encourages agilon investors who have suffered significant losses to contact the firm directly to acquire more information.
CLICK HERE TO SIGN UP FOR THE CASE
WHO CAN BE A LEAD PLAINTIFF?
A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. The lead plaintiff is usually the investor or small group of investors who have the largest financial interest and who are also adequate and typical of the proposed class of investors. The lead plaintiff selects counsel to represent the lead plaintiff and the class and these attorneys, if approved by the court, are lead or class counsel. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
ABOUT KESSLER TOPAZ MELTZER & CHECK, LLP
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country and around the world. The firm has developed a global reputation for excellence and has recovered billions of dollars for victims of fraud and other corporate misconduct. All of our work is driven by a common goal: to protect investors, consumers, employees and others from fraud, abuse, misconduct and negligence by businesses and fiduciaries.
For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
CONTACT:
Kessler Topaz Meltzer & Check, LLP
Jonathan Naji, Esq.
280 King of Prussia Road
Radnor, PA 19087
(484) 270-1453
info@ktmc.com
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