NEW YORK, June 22, 2020 (GLOBE NEWSWIRE) -- Lowey Dannenberg, a preeminent law firm in obtaining redress for consumers and investors, has filed a federal securities class action in the United States District Court for the Eastern District of New York on behalf of its client and all similarly situated investors who purchased or otherwise acquired common stock of Chembio Diagnostics, Inc. (“Chembio” or the “Company”) on March 12, 2020 through June 16, 2020, inclusive (the “Class Period”). The class action alleges violations of the federal securities laws against Chembio and certain of its current and former officers and directors.
Headquartered in Hauppauge, New York, Chembio develops, manufactures, and commercializes point-of-care diagnostic tests for the detection and diagnosis of infectious diseases. In light of the global pandemic, the Company embarked on a mission to develop a rapid test for the detection of the COVID-19 virus and IgM and IgG antibodies (the “DPP COVID-19 Test”). The Complaint alleges that Defendants misrepresented that the Company’s DPP COVID-19 Test could determine current or past exposure to the COVID-19 virus, that its test provides high sensitivity and specificity, and was 100% accurate.
Throughout the Class Period, Chembio represented that it had developed a test which aided in determining current or past exposure to the COVID-19 virus, that it provided high sensitivity and specificity and was 100% accurate. The Company’s representations drove the stock from a closing price of $3.10 per share on March 11, 2020 to a Class Period high of $15.54 per share on April 24, 2020, an increase of more than 400%.
On June 16, 2020, the FDA issued a press release disclosing that it had revoked the Company’s Emergency Use Authorization (“EUA”) for the Company’s DPP COVID-19 Test. The FDA decision was “due to performance concerns with the accuracy of the test” and that the Company’s COVID-19 Test “generate[d] higher than expected rate of false results higher than that reflected in the authorized labeling for the device.” On this news, the stock dropped from $9.93 per share on June 16, 2020 to close at $3.89 per share on June 17, 2020, a drop of $6.04 per share, or over 60%, on a heavier than usual trade volume.
Plaintiff seeks to recover damages on behalf of the proposed Class and is represented by Lowey Dannenberg, P.C. (www.lowey.com), national firm representing institutional and individual investors, and U.S. Market Advisors Law Group PLLC (www.usmarketlaw.com).
If you have suffered a net loss from investment in Chembio common stock from March 12, 2020 through June 16, 2020, you may obtain additional information about this lawsuit and your ability to become a Lead Plaintiff, by contacting Barbara Hart at bhart@lowey.com or by calling 914-733-7227 or Andrea Farah at afarah@lowey.com or by calling 914-733-7256.