Key Takeaways: CVRx shares plunged 59 percent to $2.39 after a DOJ civil investigation disclosure. The company cut 2026 revenue guidance to $58 million-$60 million and terminated its Chief Revenue Officer. Hagens Berman and Glancy Prongay Wolke & Rotter opened securities fraud investigations.
CVRx shares plunged 59 percent to $2.39 after the device maker disclosed a U.S. Department of Justice civil investigation and cut revenue guidance.
"Our revised commercial outlook and need to improve commercial execution have led us to make a change in sales leadership," Kevin Hykes, president and CEO of CVRx, said.
The Minneapolis-area company cut its 2026 revenue guidance to $58 million-$60 million from $63 million-$67 million, citing rapid hiring that strained onboarding and training. Q2 revenue reached $15.7 million, beating consensus of $15.55 million. The company terminated Chief Revenue Officer Robert John and is searching for a new CFO after Jared Oasheim's resignation in June.
The DOJ's civil investigative demand, received in May, seeks information on whether CVRx submitted false claims to government health insurance programs through improper marketing or kickbacks. Hagens Berman and Glancy Prongay Wolke & Rotter have opened securities fraud investigations. Shares closed at $2.39 on Aug. 7, down $3.55 from the prior session, and have fallen more than 55 percent over the past week.
The DOJ demand requested information and documents regarding an investigation into whether CVRx caused the submission of false claims to government health insurance programs by improperly marketing its Barostim device, offering or paying kickbacks to healthcare providers, or providing false information to government health insurance programs, according to the company's SEC filing.
Barostim is an implantable neuromodulation device designed to treat heart failure symptoms. The company markets the device to cardiologists and electrophysiologists across the United States.
Paul Verrastro, who has more than 30 years of medical device sales experience, will lead CVRx's sales organization on an interim basis while the company searches for a permanent successor. He previously served as chief marketing and strategy officer and held leadership roles at Guidant, Boston Scientific and Medtronic, where he focused on bringing implantable cardioverter defibrillators and cardiac resynchronization therapy to market.
Hagens Berman, a national shareholder rights litigation firm, said it opened the investigation into potential violations of federal securities laws following the DOJ disclosure, guidance cuts, commercial sales force disruption, and the CRO termination. Glancy Prongay Wolke & Rotter separately announced a similar probe on behalf of CVRx investors who lost money. The firm, which has been ranked in the top 50 securities class action settlements by ISS Securities Class Action Services, also noted that whistleblowers with non-public information could receive rewards of up to 30 percent of any successful SEC recovery.
The securities fraud investigations could lead to shareholder lawsuits and additional legal costs for the company. Investors will watch for further DOJ developments and the search for a permanent CFO and CRO, with Oasheim staying on through at least Aug. 31.
This article is for informational purposes only and does not constitute investment advice.
