The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who acquired iRhythm Technologies, Inc. (“iRhythm” or the “Company) (NASDAQ: IRTC) securities during the period from January 11, 2022 through May 30, 2023, inclusive. Investors have until April 8, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

[Click here to learn more about the class action]

The lawsuit alleges that, throughout the Class Period, iRhythm failed to disclose serious issues with its Zio AT heart monitor to the FDA, patients, or investors. The Company falsely represented the Zio AT as a real-time monitor intended for a target audience of high-risk patients and touted its potential growth as an innovative product that had only begun to penetrate the market for real-time monitoring, which investors looked upon favorably given the premium selling price associated with devices approved for high-risk patients. As a result of these representations, the price of iRhythm common stock traded at artificially inflated prices throughout the Class Period.

On November 1, 2022, iRhythm revised fourth quarter and full-year guidance, explaining during a conference call that it voluntarily issued a Customer Advisory Notice to its Zio AT customers. Consequently, the Company reduced its Zio AT forecast for the quarter from the 40% growth target it had provided throughout the past three quarters to 20%. On this news, the price of iRhythm shares declined by $5.60 per share, or approximately 4.42%, from $126.77 on November 1, 2022 to close at $121.17 on November 2, 2022. The next day, the price of iRhythm shares declined an additional $14.07 per share, or approximately 11.61%, to close at $107.10 on November 3, 2022. On November 4, 2022, the Company disclosed that it initiated the Customer Advisory Notice on September 28, 2022, following issues raised by the FDA during an inspection that culminated in an inspection observation report on Form 483, and that the Customer Advisory Notice warned patients of a labeling correction related to the device’s maximum transmission limits during wear, as well as other critical issues that prevent the device from working as advertised. On this news, the price of iRhythm shares further declined by $2.43 per share, or approximately 2.36%, from $102.87 per share on November 4, 2022 to close at $100.44 on November 7, 2022.

Then, on May 4, 2023, the Company announced that it received a Subpoena Duces Tecum from the Consumer Protection Branch of the U.S. Department of Justice on April 4, 2023. Although the Company refrained from providing additional detail about the DOJ’s request, in a May 5, 2023, report, J.P. Morgan analysts noted that one of iRhythm’s competitors, Boston Scientific, had also disclosed that it received a subpoena from the DOJ relating to its real-time monitoring product, which indicated to the analysts that the DOJ investigation into iRhythm was related to the Zio AT. On this news, the price of iRhythm shares declined by $9.25 per share, or approximately 6.90%, from $134.04 per share on May 4, 2023 to close at $124.79 on May 5, 2023.

Finally, on May 30, 2023, iRhythm disclosed that it had received a warning letter from the FDA, which addressed several serious issues tied to the marketing and capabilities of the Zio AT device. In particular, the FDA noted that iRhythm had falsely marketed the Zio AT as approved for use in high-risk patients that require real-time cardiac monitoring. In truth, according to the FDA, Zio AT is only approved for long-term monitoring of arrhythmia events for non-critical care patients where real-time monitoring is not needed. On this news, the price of iRhythm shares declined by $7.41 per share, or approximately 6.08%, from $121.68 per share on May 30, 2023 to close at $114.27 on May 31, 2023.

If you purchased or otherwise acquired iRhythm securities, have information, or would like to learn more about this lawsuit and how it might affect your rights, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.

Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website: https://www.kmllp.com.

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