Pomerantz Appointed Co-Lead Counsel in GoodRx Holdings Securities Litigation
On April 8, 2021, U.S. District Judge David O. Carter of the Central District of California (Western Division) appointed Pomerantz LLP as Co-Lead Counsel on behalf of Co-Lead Plaintiffs Betty Kalmanson, Lawrence Kalmanson and Shawn Kalmanson in In re GoodRx Holdings, Inc. Securities Litigation, 2:20-cv-11444-DOC-PD (C.D.Cal.), a securities action brought on behalf of a class of defrauded investors concerning allegations that GoodRx Holdings, Inc. (“GoodRx” or the “Company”) timed its initial public offering so it would be priced before a rival online pharmaceutical business was to be announced by Amazon, Inc. (“Amazon”).
GoodRx is a healthcare company that operates a website and mobile app that allows consumers to track prescription drug prices and find discounts on medications.
Allegations include that, in the Offering Documents for GoodRx’s September 23, 2020 IPO and throughout the Class Period, Defendants failed to disclose that: (i) GoodRx was misrepresenting competitive market trends and its future business prospects; (ii) the Company was aware of Amazon’s imminent launch of a competing online pharmacy platform (“Amazon Pharmacy”); (iii) the Company timed its IPO to launch before the announcement of Amazon Pharmacy; and (iv) insiders at the Company collectively earned more than $369 million from the sale of the GoodRx stock.
On September 23, 2020, GoodRx launched its IPO and began publicly trading based on Offering Documents that stated that their partnerships created “a deep competitive moat” for the Company and that it was “a market leader with a significant scale and brand advantage over our competitors.”
On November 12, 2020, GoodRx held an earnings call to discuss its third quarter 2020 financial results during which Co-CEO Trevor Bezdek stated that “we have not seen… any competitors that have really impacted our business in any way… historically or currently,” despite numerous media reports that Amazon intended to enter the online pharmaceutical business after its 2018 acquisition of PillPack, Inc., an online pharmacy startup. Furthermore, both GoodRx and Amazon were in partnerships with a third company, Inside Rx, a leading source for prescription drug prices and savings.
The truth emerged on November 17, 2020 when, just weeks after GoodRx completed its IPO, Amazon announced Amazon Pharmacy, a new store on Amazon that allows customers to complete an entire pharmacy transaction on their desktop or mobile device which, among other things, would compete directly with GoodRx’s platform by making it “simple for customers to compare prices and purchase medications for home delivery, all in one place.”
On this news, GoodRx’s share price fell $10.51 per share, or 22.5%, to close at $36.21 per share on November 17, 2020.