BOCA RATON, Fla., Sept. 17, 2024 (GLOBE NEWSWIRE) — Saxena White P.A. has filed a securities fraud class action lawsuit (the “Class Action”) in the United States District Court for the Northern District of Illinois against Walgreens Boots Alliance, Inc. (“Walgreens” or the “Company”) (NASDAQ: WBA) and certain of its executive officers (collectively, “Defendants”). The Class Action asserts claims under Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and U.S. Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder on behalf of all persons or entities who purchased Walgreens common stock between July 1, 2021 and June 26, 2024, inclusive (the “Class Period”), and were damaged thereby (the “Class”). The Class Action filed by Saxena White is captioned: Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefits Fund v. Walgreens Boots Alliance, Inc., et al., No. 24-cv-8559 (N.D. Ill.).
Walgreens is one of the largest providers of retail, pharmacy, and healthcare services in the world, operating in three business segments, including U.S. Healthcare. In 2019, to facilitate Walgreens’ transition to become a healthcare company rather than just a retail pharmacy, Walgreens announced it was collaborating with Village Practice Management Company, LLC (“VillageMD”) on a trial period to open primary care clinics next to five Walgreens stores. In July 2020, following a “highly successful trial[,]” Walgreens announced a new agreement and expanded partnership with VillageMD to invest $1 billion over the next three years, acquire a 30% stake in VillageMD, and become the “first national pharmacy chain to offer full-service doctor offices co-located at its stores at a large scale.” By January 2021, Walgreens announced it had already completed its $1 billion investment and renegotiated the terms of its agreement with VillageMD. This enabled Walgreens to accelerate rollout of “600 to 700 Village Medical at Walgreens primary care clinics in more than 30 U.S. markets within the next four years, with the intent to build hundreds more thereafter.” Then, in October 2021, Walgreens announced an additional $5.2 billion investment in VillageMD, increasing the Company’s ownership stake in VillageMD from 30% to 63%.
Throughout the Class Period, Defendants touted Walgreens’ partnership with VillageMD and the Company’s ability to scale VillageMD’s business to drive long-term growth. For example, a Walgreens executive touted that “VillageMD is a unique business that has the scale and momentum to drive tremendous long-term growth[,]” with “a clear path to national expansion and rapid growth, especially given their partnership with Walgreens.”
The Class Action alleges that, during the Class Period, Defendants made materially false and/or misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and prospects, including that: (1) despite repeated assurances, Walgreens was not disciplined about deploying capital to grow the U.S. Healthcare segment and did not know how to work with and scale the VillageMD model; (2) Walgreens was not able to profitably scale VillageMD to support the Company’s long-term growth initiatives; (3) Walgreens’ rollout of VillageMD clinics was not going according to plan; (4) Walgreens’ U.S. Healthcare segment was experiencing slower growth than expected because Walgreens had oversaturated markets with VillageMD clinics, leading these newly created medical clinics to be understaffed and see fewer patients; (5) Walgreens executives had failed to manage investor expectations regarding the negative impact that the VillageMD expansion would have on Walgreens’ short-term profits, overstatement of the value of VillageMD, and the risk that the Company would be forced to divest part or all of its stake in VillageMD; and (6) as a result of the above, Defendants’ statements about Walgreens’ business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times .
The truth began to be revealed prior to the markets opening on June 27, 2023, when Walgreens announced disappointing earnings results for the fiscal third quarter of 2023, slashed its fiscal year 2023 guidance, and revealed Walgreens was “experiencing a slower profit ramp for U.S. Health Care” due to “VillageMD [] underperformance.” On this news, the price of Walgreens common stock fell over 10%, from a closing price of $31.59 per share on June 26, 2023, to a closing price of $28.64 per share on June 27, 2023.
On July 27, 2023, after the markets closed, Walgreens announced the departure of its Chief Financial Officer. On this news, the price of Walgreens common stock declined by nearly 3%, from a closing price of $30.63 per share on July 27, 2023, to a closing of $29.80 per share on July 28, 2023. On September 1, 2023, before the markets opened, Walgreens announced the departure of its Chief Executive Officer. On this news, the price of Walgreens common stock fell more 7%, from a closing price of $25.31 per share on August 31, 2023, to a closing price of $23.43 per share on September 1, 2023.
On January 4, 2024, before the markets opened, Walgreens announced disappointing financial results for the fiscal first quarter of 2024, which analysts attributed to operations in the VillageMD clinics. On this news, the price of Walgreens common stock fell over 5%, from a closing price of $25.57 per share on January 3, 2024, to a closing price of $24.26 per share on January 4, 2024.
Finally, on June 27, 2024, before the markets opened, Walgreens announced that its financial results for the fiscal third quarter of 2024 were well below expectations. On that same day, in an interview with The Wall Street Journal, Walgreens’ new Chief Executive Officer said that the Company would reduce its stake in VillageMD, and would no longer be its majority owner. On this news, the price of Walgreens stock fell $3.47 per share, or over 22%, from a closing price of $15.66 per share on June 26, 2024, to a closing price of $12.19 per share on June 27, 2024.
If you purchased Walgreens common stock during the Class Period and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as lead plaintiff. If you wish to apply to be lead plaintiff, a motion on your behalf must be filed with the U.S. District Court for the Northern District of Illinois no later than November 18, 2024. The lead plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as lead plaintiff to share in any Class recovery in the Class Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member.
You may contact Marco A. Dueñas (mduenas@saxenawhite.com), a Senior Attorney at Saxena White P.A., to discuss your rights regarding the appointment of lead plaintiff or your interest in the Class Action. You also may retain counsel of your choice to represent you in the Class Action.
You may obtain a copy of the Complaint and inquire about actively joining the Class Action at www.saxenawhite.com.
Saxena White P.A., with offices in Florida, New York, California, and Delaware, is a leading national law firm focused on prosecuting securities class actions and other complex litigation on behalf of injured investors. Currently serving as lead counsel in numerous securities fraud class actions nationwide, Saxena White has recovered billions of dollars on behalf of injured investors.
CONTACT INFORMATION
Marco A. Dueñas, Esq.
mduenas@saxenawhite.com
Saxena White P.A.
10 Bank Street, Suite 882
White Plains, New York 10606
Tel.: (914) 437-8551
Fax: (888) 631-3611
www.saxenawhite.com
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