Saxena White P.A. Files Securities Fraud Class Action Against Dentsply Sirona Inc. and Certain of Its Executives

/EIN News/ -- BOCA RATON, Fla., Nov. 26, 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 Southern District of New York against Dentsply Sirona Inc. (“Dentsply” or the “Company”) (NASDAQ: XRAY) and certain of its executive officers (collectively, “Defendants”). The Class Action asserts claims under Sections 10(b) and 20(a) of the Securities 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 and entities that purchased Dentsply common stock between December 1, 2022 and November 6, 2024, inclusive (the “Class Period”), and were damaged thereby (the “Class”). The Class Action filed by Saxena White is captioned North Collier Fire Control and Rescue District Firefighters’ Retirement Plan v. Dentsply Sirona Inc., et al., No. 24-cv-9083 (S.D.N.Y.).

Based in Charlotte, North Carolina, Dentsply manufactures professional dental products, including CAD/CAM computer-aided design and manufacturing systems, imaging equipment, motorized dental handpieces, consumables (such as files, sealers, and needles), implants, prosthetics, and orthodontics, such as clear aligners. Dental and medical devices sold by Dentsply in the United States, including clear aligners, are generally classified by the U.S. Food and Drug Administration (“FDA”) into a category that makes them subject to the same regulations that apply to all medical devices. Dentsply’s four segments are: Connected Technology Solutions, Essential Dental Solutions, Wellspect Healthcare, and Orthodontic and Implant Solutions, which includes Byte, a direct-to-consumer (“DTC”) aligner solution. In 2023, Orthodontic and Implant Solutions, including Byte, accounted for more than 26% of Dentsply’s net sales by segment.

Prior to the start of the Class Period, on December 31, 2020, Dentsply paid $1.04 billion in cash to acquire Byte, a manufacturer of affordable, “doctor-directed,” DTC clear dental aligners. According to Dentsply, Byte held a “leadership position in the rapidly growing direct-to-consumer, doctor-directed clear aligner market.”  In the January 4, 2021 press release announcing the acquisition, Dentsply explained that, priced “[a]t under $85 per month, Byte has found a way to make the inaccessible, accessible—providing an easy, convenient and affordable way to upgrade your smile through the Byte Teledentistry platform.”

The Class Action alleges that, during the Class Period, the Defendants made materially false and misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and prospects, including that: (1) Dentsply targeted low-income people who did not have access to good oral hygiene education, a dentist, or dental insurance, which often meant patients signing up for Byte had underlying dental issues that would have made them ineligible for treatment; (2) the push for Byte growth and sales commissions caused sales employees to sell to contraindicated patients; (3) as a result of the above, the Byte patient onboarding workflow did not provide adequate assurance that contraindicated patients did not enter treatment; (4) before and during the Class Period, reports of Byte patient injuries were pouring in; (5) Dentsply knew that its Byte aligners were causing severe patient injuries for years but did little to investigate those injuries or notify the FDA; (6) Dentsply had no systems in place to notify the FDA of these injuries, which the Company is required to do within 30 days of learning of a problem; (7) the FDA had received a sharp uptick in reports of serious injuries from Byte patients; (8) as a result of the above, Dentsply materially overstated the goodwill value of Byte; (9) as a result of the above, Defendants’ positive statements about the Company’s 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 after markets closed on October 24, 2024, when Dentsply announced the “voluntary suspension of sales and marketing of its Byte Aligners and Impression Kits while the Company conducts a review of certain regulatory requirements related to these products.” Dentsply claimed that the Byte sales and marketing suspension was a “precautionary measure.” Dentsply further disclosed that it “expects to record non-cash charges for the impairment of goodwill within the range of $450-$550 million” for its Orthodontic and Implant Solutions segment. During a “Byte business update call” before markets opened on October 25, 2024, Chief Executive Officer (“CEO”) Simon D. Campion gave more context about the Byte suspension: “[I]n connection with our ongoing discussions with FDA, we have determined that our patient onboarding workflow may not provide adequate assurance that certain contraindicated patients do not enter treatment with Byte Aligners.” On this news, the price of Dentsply stock fell over 4%, from a closing price of $24.41 per share on October 24, 2024, to a closing price of $23.31 per share on October 25, 2024.

The truth was revealed on November 7, 2024 when, before the markets opened, Dentsply reported its financial results for the third quarter of 2024, disclosing that Dentsply had “recorded a non-cash charge for the impairment of goodwill of ($495) million net of tax within the Orthodontic and Implant Solutions segment.” During the corresponding earnings call held later that day, CEO Campion further disclosed that although Dentsply was “not at a point in our analysis to make a definitive decision concerning Byte,” the Company was “thoroughly evaluating strategic options, which may include a discontinuation of some or all of this business.” On this news, the price of Dentsply stock fell over 28%, from a closing price of $23.98 per share on November 6, 2024, to a closing price of $17.26 per share on November 7, 2024, on extraordinary trading volume.

If you purchased Dentsply 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 Southern District of New York no later than January 27, 2025. 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 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