Dallas, Texas 07/07/2015 (Financialstrend) – A law firm has kick started investigations on allegations that certain BioScrip Inc (NASDAQ:BIOS) directors forfeited their responsibilities that resulted in damages to the stock. The plaintiff alleges that the directors breached certain fiduciary laws that negatively affected the stock’s valuation in the market.
Fiduciary Violation Concerns
Allegations forming bases of the lawsuit date back to September 23, 2013, where BioScrip Inc (NASDAQ:BIOS) disclosed it had received an investigative demand and a Subpoena regarding the distribution of Exjade. A product under the care of Novartis Pharmaceuticals Corporation
A week later on September 30, 2013, a lawsuit against BioScrip Inc (NASDAQ:BIOS) was filed alleging that the company had violated Security laws. It is alleged that BioScrip made false or misleading statements and failed to disclose that it improperly distributed Exjade in a kickback scheme involving Novartis. A federal judge failing to dismiss the lawsuit on March 31, 2015, means a lot is to be expected in court once investigations into the matter are complete.
Expected Growth in Q2
Despite posting a 9.4% increase in first quarter revenues, BioScrip Inc (NASDAQ:BIOS) net loss widened to 19 cents per share from $17 cents a share reported a year earlier. Earnings also fell short of analysts’ estimates of a loss of 8 cents a share. Chief executive officer, Rick Smith believes the company is on track to post impressive results in the second quarter, Q1 results having reflected double-digit organic growth.
The management team remains focused on initiating cost savings measures that are expected to increase the company’s operating cash flow expected to strengthen the balance sheet. As of the end of March 31, 2015, BioScrip Inc (NASDAQ:BIOS) had an outstanding debt of $418.8 million with $69.8 million available for working capital needs.
BIOS recently completed an offer of $200,000,000 in aggregate principal amount of its 8.875% Senior Notes due in 2021.