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Novartis (NVS) Halt of Production Due to Quality Issues Case
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- In early May 2022, Novartis (NVS) announced suspension of production at sites in Italy and the US due to quality concerns. Then, in late May 2022, an article reported that US FDA had in 2021 addressed problems at the US site, including failure to notify customers about distribution of subquality product batches.
- On it, $NVS in early May fell 2.3%, losing $4.3B+ of shareholder value, and $NVS fell again in late May, losing $1B+ of shareholder value.
- Investors may have grounds to suspect that Novartis has quality control setbacks, which led to their losses.
On May 5, 2022, Novartis announced a temporary suspension of production at its radioligand therapy production sites in Ivrea, Italy and Millburn, New Jersey. This production halt was needed to address potential quality issues identified in manufacturing process.
On this news, $NVS fell 2.3% and lost over $4.3 billion of its market capitalization, seriously damaging shareholders.
Then, on May 31, 2022, STAT News published an article claiming that the problems at Millburn site were documented by the FDA inspection in late 2021, including possible failure to notify customers about batches of Lutathera that were distributed despite failing to meet quality specifications.
On this news, $NVS fell sharply in intraday trading and lost over $1 billion of its market capitalization, further damaging shareholders.
Considering all the information, investors might have grounds to suspect that Novartis failed to timely disclose company’s quality control setbacks, which consequently led to their losses.
The case is already under investigation by at least one of the reputable law firms.
Failure to Disclose,
Shock Event Date
31 May 2022