b'In re Merit Med. Sys., Inc., Case No. 8:19-cv- $27 million and withdrawing its 2020 guidance. Merit 02326 (DOC), 2020 WL 2611256 (C.D. Cal.)explained that ClariVein and Ciannas sales had been lagging and that Merit was nine or ten months behind Failure to Successfully Integrate Acquisitions in integrating ClariVein. Merit reported that it fell on Merit Medical Systems, Inc. (Merit) is a medical device[its] face and planned to halt its growth-by-acquisition company that manufactures and sells single-usestrategy. After this news, Merits stock dropped 29%.medical products to hospitals and physicians. MeritOn December 3, 2019, investors filed a putative class has a growth-by-acquisition strategy. As part of thisaction complaint against Merit and two of its officers for strategy, in 2018, Merit acquired (1) Cianna Medical, Inc.violations of Sections 10(b) and 20(a) and Rule 10b-5 (Cianna), a manufacturer of devices for treatment ofof the 1934 Act, alleging that defendants made false breast cancer, and (2) Vascular Insights, LLC (Vascularand misleading statements and omissions concerning Insights), known for manufacturing ClariVein, a deviceMerits integration of Cianna and ClariVein and the for varicose vein treatment. Following the acquisitions,strength of its sales. Merit assured investors it was successfully integratingDefendants filed a motion to dismiss the consolidated Cianna and Vascular Insights. In aid of such integration,complaint on August 14, 2020. The motion is fully Merit informed investors that it would retain Ciannasbriefed as of October 22, 2020, and remains pending. full sales force, noting that its team of highly trained and specialized sales representatives had deep and valuable relationships with hospitals and physicians Zaidi v. Adamas Pharmaceuticals, Inc., critical connections for product sales. On February 26,Case No. 4:19-cv-08051 (JSW) (N.D. Cal.) 2019, Merit announced that the Cianna integration was going as well as could be expected, and that ClariVeinDrug Commercialization and Adoptionwas on its way to generating 2019 revenues of $10Adamas Pharmaceuticals, Inc. (Adamas) is a pharma-million to $11 million. On April 23, 2019, Merit disclosedceutical company that develops drug treatments for that the Cianna integration was complete and that itchronic neurological disorders. Its primary drug is may be the best integration in Merits history becauseGOCOVRI, which has been approved by FDA to treat the company had successfully maintained the [Cianna]levodopa-induced dyskinesia (LID), a side effect sales force. Merit also highlighted strong sales inin patients with Parkinsons disease who are treated standalone products, including the ClariVein productwith levodopa. From August 2017 to September 2019, line, and noted that it had not seen a downtick inAdamas and its executives made various optimistic ClariVeins performance post-acquisition. representations concerning the adoption of GOCOVRI On July 25, 2019, however, Merits CEO disclosedby physicians, insurance coverage for GOCOVRI, during an investor call that ClariVein ha[d]nt hadand expected market share for GOCOVRI. Despite an order all year, and that there had been attritionAdamass optimism, however, GOCOVRI failed to gain among Ciannas sales representatives resulting intraction for treatment of LID because (1) of its high post-integration sales that were below expectations.price and lack of insurance coverage, (2) insurers The companys CEO attributed the lack of ClariVeinexcluded GOCOVRI from prescription formularies orders to a short-term problem of doctors orderingor required patients to use step therapy prior to too much product before the acquisition, and assuredcovering GOCOVRI, (3) Adamas was using a specialty investors that the Cianna sales force attrition was justpharmacy to distribute the drug (which weakened a little bit. On this news, Merits stock price droppedphysician demand), and (4) of competition from other by over 25%. On October 30, 2019, Merit disclosedpharmaceutical companies. that it was slashing year-end revenue guidance by 55'