TransMedics Group (TMDX) Financial Success Faces Legal Scrutiny Amid Allegations
SAN FRANCISCO, April 10, 2025 (GLOBE NEWSWIRE) -- TransMedics Group, Inc. (NASDAQ: TMDX) reported blockbuster Q4 2024 earnings in late February 2025, booking $121.6 million in revenue (up 50% year-over-year) and $35.5 million in full-year net income, fueled by surging adoption of its OCS devices. Despite these positive results, TMDX stock continues to trade significantly below its 2024 highs, as the earnings report arrives amid explosive allegations from short-seller Scorpion Capital and mounting legal challenges, including an investor class action lawsuit accusing the company and its senior executives of securities fraud.
Hagens Berman is investigating the alleged claims and urges investors who purchased TransMedics shares and suffered substantial losses to submit your losses now.
Lead Plaintiff Deadline: Apr. 15, 2025
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844-916-0895
Growth Fueled by Market Dominance
On February 27, TransMedics released positive earnings and guidance exceeding analysts' expectations. The company completed 3,715 U.S. OCS cases in 2024, capturing 20.9% market share across heart, lung, and liver transplants—a 58% annual increase. Its logistics fleet now includes 19 aircraft, with two more planned for 2025 to support a projected revenue of $530M-$552M, exceeding Wall Street consensus of $521.62M.
But TDMX shares showed a muted reaction to the company's strong Q4 results and remain 58% below 52-week highs. Investors have grown increasingly skeptical about the company's long-term profitability, with concerns around compressing margins and adoption hurdles.
The Scorpion Report
Investors' fears were exacerbated by a highly critical short report issued by Scorpion Capital on January 10, 2025. The report, titled 'Walk Like An Egyptian: A 'Mafia-Style' Extortion, Racketeering, and Organ Trafficking Scheme Masquerading as a Medical Device Company,' spans 342 pages and alleges severe misconduct, including kickbacks, billing fraud, unreported device failures, off-label misuse, and monopolistic practices. It claims TransMedics is in a 'death spiral' and sets a target price of $0 for the stock.
Key allegations in the report include:
Racketeering and monopolistic practices tied to its Organ Care System (OCS) technology.
Off-label usage and safety concerns regarding its devices.
Excessive pricing for bundled services compared to alternatives.
Claims of organ trafficking and unethical business practices.
Shares plummeted 15% after Scorpion's January 10 report.
The TransMedics Group (TDMX) Class Action
Adding to the controversy, TransMedics and its executives are now defendants in a securities class action lawsuit filed in the U.S. District Court for Massachusetts. The complaint alleges that between February 28, 2023, and January 10, 2025—the period encompassing FDA approvals and rapid market expansion—the company misled investors about its business practices. Echoing Scorpion Capital's claims, it accuses TransMedics of:
Using kickbacks and coercive tactics to drive revenue growth;
Concealing safety issues tied to its OCS devices;
Overbilling hospitals while forcing them into bundled service contracts.
The lawsuit further claims that these practices subjected TransMedics to heightened regulatory scrutiny, culminating in public allegations from U.S. Representative Paul Gosar in February 2024 about price gouging and resource misappropriation.
Hagens Berman's Investigation
Prominent class action law firm Hagens Berman is investigating whether TransMedics may have violated the U.S. securities laws.
'We are looking into whether TransMedics' growth was fueled by undisclosed illicit sales practices,' said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in TransMedics and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now »
If you'd like more information and answers to frequently asked questions about the TransMedics case and our investigation, read more »
Whistleblowers: Persons with non-public information regarding TransMedics should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
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