Fortrea is a global clinical research organization (“CRO”) that provides biopharmaceutical product and medical device development solutions to pharmaceutical, biotechnology, and medical device customers.  According to the complaint, in June 2023, Labcorp Holdings Inc. spun off Fortrea as a standalone, publicly traded company (the “Spin-Off”).  At the time of the Spin-Off, certain of the long-term projects in Fortrea’s portfolio remained ongoing (the “Pre-Spin Projects”).

In connection with the Spin-Off, Labcorp and Fortrea entered into several transition services agreements (the “TSAs”), pursuant to which Fortrea pays Labcorp to provide certain transitional services for a set period.

The Fortrea class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that:

1. Fortrea overestimated the amount of revenue the Pre-Spin Projects were likely to contribute to Fortrea’s 2025 earnings;
2. Fortrea overstated the cost savings it would likely achieve by exiting the TSAs;
3. As a result, Fortrea’s previously announced EBITDA targets for 2025 were inflated; and (iv) accordingly, the viability of Fortrea’s post-Spin-Off business model, as well as its business and/or financial prospects, were overstated.

The Fortrea class action lawsuit further alleges that on September 25, 2024, Jefferies published a report downgrading Fortrea from buy to hold, citing perceived weaknesses in Fortrea’s business model as a CRO amid pressure on biotechnology funding and suggested that the cost savings Fortrea expects to achieve by exiting the TSAs are “[n]ot as [m]aterial as [o]ne [m]ight [t]hink,” stating that “IT infrastructure costs to exit the TSAs are already non-GAAPed out of adjusted EBITDA.  Thus, once TSAs are exited, [Fortrea] will just be replacing TSA costs with internal operating costs.”  On this news, the price of Fortrea stock fell more than 12%, according to the complaint.

Then, on December 6, 2024, market analyst Baird Equity Research downgraded Fortrea to neutral from outperform after Fortrea abruptly cancelled two scheduled conferences, stating that “[g]iven our ongoing concerns around the sector, [Fortrea’s] choppy history post spin, and lack of clarity on the abrupt communications course change, we cannot recommend an actionable investment (buy or sell),” according to the complaint.  The Fortrea lawsuit alleges that on this news, the price of Fortrea stock fell more than 8%.

Finally, on March 3, 2025, the Fortrea class action lawsuit further alleges that Fortrea announced its fourth quarter and full year 2024 financial results, disclosing that its “targeted revenue and adjusted EBITDA trajectories for 2025 [were] not in line with [its] prior expectations.”  According to the complaint, specifically, in an earnings call held that same day, Fortrea revealed that Fortrea’s Pre-Spin projects are “late in their life cycle [and] have less revenue and less profitability than expected for 2025,” that “post-spin work is not coming on fast enough to offset the pre-spin contract economics,” and that “older versus newer mix issue will continue to negatively impact [Fortrea’s] financial performance during 2025.”

On this news, the price of Fortrea stock fell more than 25%, according to the Fortrea class action lawsuit.

Potential Outcomes of the Fortrea Class Action Lawsuit

The potential outcomes of the Fortrea class action lawsuit vary widely, depending on the evidence presented and the legal arguments made. One possible result is a settlement, where Biohaven may agree to compensate the affected shareholders without admitting wrongdoing. Settlements can provide a quicker resolution and a guaranteed recovery, albeit potentially lower than if the case were won in court.

Alternatively, if the case goes to trial and the plaintiffs succeed, the court may award damages to the affected shareholders. This could include compensatory damages for financial losses, as well as punitive damages if the court finds egregious misconduct. A favorable ruling could also lead to changes in Biohaven’s corporate governance and transparency practices, benefiting investors in the long term.

However, it is also possible that the Fortrea lawsuit may not succeed. In such cases, plaintiffs may not recover any damages, and the company could emerge unscathed legally. Understanding these potential outcomes is crucial for stakeholders, as it helps in setting realistic expectations and preparing for various scenarios.

Legal Process and Timeline for the Fortrea Lawsuit

The legal process for a class action lawsuit like the Fortrea lawsuit involves several key stages, each with its own timeline. Initially, the lawsuit must be certified as a class action by the court, a process that can take several months. This certification establishes the parameters of the class and confirms that the plaintiffs’ claims are sufficiently similar to warrant collective legal action.

Once certified, the discovery phase begins, where both parties gather evidence and build their cases. This stage can be lengthy, often taking a year or more, as it involves collecting and reviewing extensive documentation and conducting depositions. Following discovery, the case may proceed to trial, unless a settlement is reached beforehand.

For those involved in or affected by theFortrea class action lawsuit, understanding this timeline is essential. It provides insight into how long the process may take and what key milestones to anticipate. Staying informed about these developments will help you navigate the legal landscape and make informed decisions regarding your involvement.

How to Stay Informed About the Fortrea Class Action Lawsuit

Staying informed about the Fortrea class action lawsuit is crucial for those directly involved and anyone interested in the case’s developments. Regularly checking reputable news sources and legal updates can provide valuable insights into the lawsuit’s progress. These updates often include important information about court dates, legal motions, and potential settlements.

In addition to public sources, consider subscribing to newsletters or alerts from law firms involved in the Fortrea class action lawsuit. These can offer detailed analyses and expert opinions, helping you understand the implications of each development. Engaging with online forums or investor groups can also be beneficial, as they provide a platform to share information and experiences with others in similar situations.

Being proactive in seeking information ensures you remain aware of any changes or opportunities related to the lawsuit. Understanding the latest developments will help you make informed decisions about your investments and legal options, allowing you to act swiftly when necessary.

Evidence Gathering in the Fortrea Class Action Lawsuit: Building a Strong Case

The success of the Fortrea class action lawsuit hinges on the ability of plaintiffs to present compelling evidence. Gathering and organizing relevant documentation is a critical step in substantiating claims of corporate misconduct.

Types of Evidence

Investors should focus on collecting various types of evidence, including:

• Corporate Communications: Emails, press releases, and public statements made by Biohaven executives can provide insight into the company’s intentions and the accuracy of its disclosures.
• Financial Reports: Analyzing financial statements and reports can help establish a timeline of events and highlight discrepancies between reported performance and actual results.
• Regulatory Filings: Documents submitted to regulatory agencies, such as the FDA, can shed light on the challenges Biohaven faced in obtaining approval for its drug candidates.

Organizing Evidence

Once evidence is gathered, it should be organized systematically to facilitate its presentation in court. This may involve categorizing documents by relevance, creating timelines, and summarizing key points to support the plaintiffs’ claims.

The Impact of the Fortrea Lawsuit on Investors

The outcome of the Fortrea class action lawsuit will have significant implications for investors, both in terms of potential financial recovery and the broader impact on corporate accountability.

Potential Financial Recovery

If the plaintiffs succeed in their claims, investors may be entitled to compensation for their losses. This could include:

• Damages for Financial Losses: Investors may recover the difference between the price they paid for Biohaven securities and the price after the truth was revealed.
• Reimbursement of Legal Fees: In some cases, plaintiffs may also recover legal fees incurred during the litigation process.

Broader Implications for Corporate Accountability

The Fortrea class action lawsuit serves as a reminder of the importance of corporate transparency and accountability. A successful outcome may encourage other companies to prioritize accurate disclosures and ethical practices, ultimately benefiting investors and the market as a whole.

Conclusion

The Fortrea class action lawsuit represents a critical juncture for investors who have suffered losses due to alleged corporate misconduct. Understanding the intricacies of the lawsuit, including the challenges posed by motions to dismiss, is essential for navigating this complex legal landscape. By engaging experienced legal counsel, gathering compelling evidence, and actively participating in the litigation process, investors can enhance their chances of achieving a favorable outcome. As the Fortrea class action lawsuit unfolds, it will undoubtedly shape the future of corporate accountability and investor rights in the pharmaceutical industry.

This article provides a comprehensive overview of the Fortrea class action lawsuit, emphasizing the importance of understanding the legal process and the strategies available to investors. By focusing on the nuances of the case and the potential implications for corporate accountability, this guide serves as a valuable resource for those affected by the Fortrea class action lawsuit.