GoodRx Holdings, Inc. (GDRX)
Bronstein, Gewirtz & Grossman, LLC a nationally recognized law firm, notifies investors that a class action lawsuit has been filed against GoodRx Holdings, Inc. (“GoodRx” or “the Company”) (NASDAQ: GDRX) and certain of its officers.
Class Definition:
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired GoodRx common stock between September 23, 2020 and November 8, 2022, inclusive (the “Class Period”). Such investors are encouraged to join this case.
Case Details:
GoodRx operates a price comparison platform for prescription drugs which, in many cases, offers consumers access to lower prices for their medications through discount codes and coupons. GoodRx generates most of its revenue from contracts with pharmacy benefit managers (“PBMs”) who agree to pay GoodRx a commission on prescription drug purchases made by consumers who use GoodRx’s discount codes and coupons at participating pharmacies. GoodRx also generates a portion of its revenue from subscription plans like the “Kroger Rx Savings Club,” which provides “access [to] lower prescription prices at” pharmacies operated by The Kroger Co. (“Kroger”).
According to the Complaint, in connection with GoodRx’s initial public offering (“IPO”) on September 23, 2020, and throughout the remainder of the Class Period, Defendants continuously touted the Company’s strong relationships with pharmacies as a significant element of its business plan. Among other things, GoodRx repeatedly highlighted the Kroger Rx Savings Club—which provides “access [to] lower prescription prices at Kroger pharmacies, including over 100 common generic medications for free, $3.00, or $6.00 price points, and savings on more than 1,000 other generic medications.” Critically, however, Defendants never informed investors of the material risk that Kroger, which accounted for nearly 25% of GoodRx’s prescription transactions revenue, could unilaterally refuse to accept GoodRx’s discounts.
Investors began to learn the truth about the risks of GoodRx’s overdependence on Kroger (including the risk that, notwithstanding the Kroger Rx Savings Club, Kroger could unilaterally refuse to accept GoodRx’s discounts) on May 9, 2022, when, according to the Complaint, GoodRx revealed that late in the first quarter of 2022 “a grocery chain had taken actions that impacted acceptance of discounts from most PBMs for a subset of drugs” and that this “impacted the acceptance of many PBM discounts for certain drugs at this grocer’s stores.” GoodRx further acknowledged that this disruption “could have an estimated revenue impact of roughly $30 million” in the second quarter of 2022—resulting in the Company announcing disappointing second quarter 2022 revenue guidance of only about $190 million.
In the accompanying investor earnings call held that same day, Defendant Bezdek (the Company’s Co-Chief Executive Officer and a Company Director during the Class Period) admitted that the use of GoodRx discounts at the “grocery chain” were responsible for nearly 25% of GoodRx’s prescription transactions revenue. While Defendants refused to identify the grocer by name, analysts and media outlets quickly recognized that the unnamed grocery chain was Kroger.
On this news, the price of GoodRx common stock plummeted $2.78 per share, or more than 25%, from a close of $10.75 per share on May 9, 2022, to close at $7.97 per share on May 10, 2022.
Then, on November 8, 2022, according to the Complaint, Defendants provided further information on the severity of the revenue impact from the Kroger disruption—with the Company estimating that the “impact of the grocer issue on third quarter [prescription transactions revenue] was approximately $40 million” and that the Company expected “a combined $45 million to $50 million estimated impact to prescription transactions revenue” for the fourth quarter of 2022. Defendants further acknowledged that the Company was seeking to enter into contractual relationships with pharmacies to prevent similar disruptions from occurring in the future.
On this news, the price of GoodRx common stock declined an additional $1.18 per share, or more than 22%, from a close of $5.24 per share on November 8, 2022, to close at $4.06 per share on November 9, 2022.
The Complaint alleges that throughout the Class Period Defendants made materially false and/or misleading statements, as well as failed to disclose that:
(1) while Kroger accounted for less than 5% of the pharmacies accepting GoodRx discounts, Kroger was responsible for nearly 25% of GoodRx’s total prescription transactions revenue (the Company’s primary revenue stream);
(2) Kroger could unilaterally cease accepting GoodRx discounts, cutting off some or all of GoodRx’s revenues for purchases at Kroger’s pharmacies; and
(3) as a result, Defendants’ representations about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis.
Therefore, according to the Complaint, as a result of Defendants’ wrongful acts and omissions, and the decline in the market value of the Company’s common stock when the truth was revealed, investors have suffered significant damages.
What’s Next?
A class action lawsuit has already been filed. You may review a copy of the Complaint. You may also contact Peretz Bronstein, Esq. or his Client Relations Manager, Nathan Miller, of Bronstein, Gewirtz & Grossman, LLC: 332-239-2660. If you suffered a loss in GoodRx you have until June 21, 2024, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff.
There is No Cost to You
We represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys’ fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman:
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide.
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Contact:
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Nathan Miller,