Key Takeaways:
ADMA Biologics was sued for securities fraud after a short-seller report alleging channel stuffing erased 16% of its market value in a single day.
"ADMA engaged in an undisclosed related party transaction and used channel stuffing to create an appearance of revenue that was never there," the complaint filed in the U.S. District Court for the District of New Jersey said.
On March 24, Culper Research published a report alleging ADMA induced a distributor to stock excess inventory of its flagship immune globulin drug ASCENIV through rebates and extended payment terms. The report said ADMA's reported 20% growth in 2025 was actually a 3% decline after stripping out the alleged scheme. ADMA shares fell $2.26, or 16.6%, to $11.33 that day, then dropped another 15% to $9.63 on March 25 and 13.9% to $8.29 after Cantor Fitzgerald downgraded the stock on March 29.
The class action covers investors who purchased ADMA securities between Aug. 9, 2024 and March 25, 2026. Lead plaintiff motions must be filed by Aug. 10, 2026. The lawsuit, brought by Rosen Law Firm, seeks damages under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, alleging the company lacked adequate internal controls and made materially false statements about its business and prospects.
The lawsuit puts ADMA's reported financials under scrutiny and raises questions about the integrity of its revenue recognition practices. Investors will watch for the company's response and any potential restatement of prior results.
This article is for informational purposes only and does not constitute investment advice.
