NEW YORK, April 23, 2024 (GLOBE NEWSWIRE) — Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the District of Minnesota on behalf of all persons or entities who purchased or otherwise acquired GoodRx Holdings, Inc. (“GoodRx” or the “Company”) (NASDAQ: GDRX) securities between September 23, 2020 and November 8, 2022, inclusive (the “Class Period”). The Complaint in the lawsuit seeks to recover damages for the Company’s investors under the federal securities laws.
The Complaint alleges that 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, the Complaint alleges that the Defendants failed to disclose to investors that: (1) while Kroger accounted for less than 5% of the pharmacies accepting GoodRx discounts, Kroger was responsible for nearly 25% of GoodRx’s total prescription transactions revenue (the Company’s primary revenue stream); and (2) Kroger could unilaterally cease accepting GoodRx discounts, cutting off some or all of GoodRx’s revenues for purchases at Kroger’s pharmacies; and (3) as a result, Defendants’ representations about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis.
The Complaint further alleges that investors began to learn the truth about the risks of GoodRx’s overdependence on Kroger (including the risk that, notwithstanding the Kroger Rx Savings Club, Kroger could unilaterally refuse to accept GoodRx’s discounts) on May 9, 2022, when GoodRx revealed that, late in the first quarter of 2022, “a grocery chain had taken actions that impacted acceptance of discounts from most PBMs for a subset of drugs” and that this “impacted the acceptance of many PBM discounts for certain drugs at this grocer’s stores.” GoodRx further acknowledged that this disruption “could have an estimated revenue impact of roughly $30 million” in the second quarter of 2022—resulting in the Company announcing disappointing second quarter 2022 revenue guidance of only about $190 million.
The Complaint further alleges that in the accompanying investor earnings call held that same day, Defendant Bezdek admitted that the use of GoodRx discounts at the “grocery chain” were responsible for nearly 25% of GoodRx’s prescription transactions revenue. The Complaint alleges that even though Defendants refused to identify the grocer by name, analysts and media outlets quickly recognized that the unnamed grocery chain was Kroger.
The Complaint alleges that on these news, the price of GoodRx common stock fell $2.78 per share, or more than 25%, from a close of $10.75 per share on May 9, 2022, to close at $7.97 per share on May 10, 2022.
The Complaint further alleges that on November 8, 2022, Defendants provided further information on the seriousness of the revenue decline from Kroger’s actions—with the Company estimating that the “impact of the grocer issue on third quarter [prescription transactions revenue] was approximately $40 million” and that the Company expected “a combined $45 million to $50 million estimated impact to prescription transactions revenue” for the fourth quarter of 2022. The Complaint alleges that Defendants further admitted that the Company was seeking to enter into contractual relationships with pharmacies to prevent similar disruptions from occurring in the future.
The Complaint further alleges that on this news, the price of GoodRx common stock declined an additional $1.18 per share, or more than 22%, from a close of $5.24 per share on November 8, 2022, to close at $4.06 per share on November 9, 2022
Investors who purchased or otherwise acquired shares of GoodRx should contact the Firm prior to the June 21, 2024 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
