Did you lose money on investments in Rite Aid? If so, please visit Rite Aid Corporation Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or pallocco@bernlieb.com to discuss your rights.
New York, New York--(Newsfile Corp. - October 27, 2022) - Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, reminds investors of the deadline to file a lead plaintiff motion in a securities class action lawsuit that has been filed on behalf of investors who purchased or acquired the securities of Rite Aid Corporation ("Rite Aid" or the "Company") (NYSE: RAD) between April 14, 2022 and September 28, 2022, inclusive (the "Class Period"). The lawsuit was filed in the United States District Court for the Eastern District of Pennsylvania and alleges violations of the Securities Exchange Act of 1934.
Rite Aid, through its subsidiaries, operates a chain of retail drugstores in the U.S. The Company operates through two segments, Retail Pharmacy and Pharmacy Services. The Pharmacy Services segment provides an integrated suite of pharmacy benefit management ("PBM") offerings through, inter alia, the Company's Elixir subsidiary, including technology solutions, mail delivery services, specialty pharmacy, network and rebate administration, claims adjudication, and pharmacy discount programs.
In Rite Aid's Q4 2022 earnings call on April 14, 2022, Rite Aid's President and CEO, Heyward Rutledge Donigan ("Donigan"), addressed the growth of Elixir's PBM services business during the selling season ending January 1, 2023. Donigan represented that (i) in the past few months, Elixir had already "sold 35,000 new members" (as against a total of 55,000 new members in the prior year), (ii) Elixir was a finalist for 150,000 additional new members, and "results have shown that once we get to finalist, we're winning deals 35% of the time," and (iii) Elixir had "a current pipeline of nearly 1 million members and growing."
In a letter to shareholders, dated June 10, 2022, appearing in Rite Aid's 2022 Notice of Annual Meeting of Stockholders and Proxy Statement, Donigan stated, "[o]ur Elixir account and sales teams are gaining momentum, and we are executing more efficiently by consolidating functions. And the market is noticing-we have added 34,000 individuals covered by Elixir's PBM services since January 1, 2022, with many more in the pipeline."
In Rite Aid's Q1 2023 earnings call on June 23, 2022, Donigan stated that "[o]ur strong network contracts, new rebate capabilities, innovative clinical services and expertise in government programs have enabled us to add 80,000 new lives for January 1, 2023 start date. These are more new lives than we sold last year. And additionally, the selling season is still in progress, and we've got close to 1 million lives remaining in the pipeline for January 1, 2023." On the same call, Elixir's COO, Chris DuPaul, advised that "we've had a pretty strong start to our selling season, particularly on the health plan side," and "we're feeling really good about where our lives are headed going into [1/1/23]. . ."
Plaintiff alleges that Defendants made materially false and misleading statements throughout the Class Period.. Specifically, Plaintiff alleges that Defendants failed to disclose that: (i) despite representations to the contrary, the number of new members (i.e., "lives") that the Elixir PBM services business was adding during the selling season ending on January 1, 2023 was in material decline; and (ii) Rite Aid was likely to recognize a significant charge for the impairment of goodwill related to Elixir due to a decrease in "lives" covered by Elixir's PBM services business.
On September 29, 2022, Rite Aid announced a $252.2 million charge for the impairment of goodwill related to the Company's Elixir subsidiary. On an earnings call held later in the day, Rite Aid's Chief Financial Officer, Matt Schroeder, explained that the large impairment charge was related to Elixir based on "an update to our estimate of lives for 2023 based on the latest selling season," and that Rite Aid "expect[ed] lives to go down."
On this news, Rite Aid's stock price fell $1.97 per share, or 28.02%, to close at $5.06 per share on September 29, 2022.
If you wish to serve as lead plaintiff, you must move the Court no later than December 19, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn't require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
If you purchased Rite Aid securities, and/or would like to discuss your legal rights and options please visit Rite Aid Corporation Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or pallocco@bernlieb.com.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal's "Plaintiffs' Hot List" thirteen times and listed in The Legal 500 for ten consecutive years.
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Contact Information:
Peter Allocco
Bernstein Liebhard LLP
https://www.bernlieb.com
(212) 951-2030
pallocco@bernlieb.com
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/141800
