NEW YORK, NY - 
(NewMediaWire) - May 13, 2024 - Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) reminds investors that a complaint has been filed on behalf of purchasers or acquirers of GoodRx Holdings, Inc. (“GoodRx” or the “Company”) (NASDAQ: GDRX) common stock between September 23, 2020 and November 8, 2022 (the “Class Period”). Click Here to Join Investigation.
Deadline Reminder: If you are a member of the proposed Class, you may move the court no later than June 21, 2024 to serve as a lead plaintiff for the purported class. If you have losses, we encourage you to contact us to learn more about the lead plaintiff process.
GoodRx operates a price comparison platform for prescription drugs which, in many cases, offers consumers access to lower prices (through discount codes and coupons) for their medications. As alleged in the complaint, GoodRx generates most of its revenue from contracts with pharmacy benefit managers (“PBMs”) who agree to pay GoodRx a commission on prescription drug purchases made by consumers who use GoodRx’s discount codes and coupons at participating pharmacies. The complaint also alleges that GoodRx generates a portion of its revenue from subscription plans like the “Kroger Rx Savings Club,” which provides “access [to] lower prescription prices at” pharmacies operated by The Kroger Co. (“Kroger”).
According to the complaint in connection with GoodRx’s initial public offering on September 23, 2020, and throughout the remainder of the Class Period, Defendants continuously touted the Company’s strong relationships with pharmacies as a significant element of its business plan. Among other things, GoodRx repeatedly highlighted the Kroger Rx Savings Club. Critically, however, according to the complaint, Defendants never informed investors of the material risk that Kroger, which accounted for nearly 25% of GoodRx’s prescription transactions revenue, could unilaterally refuse to accept GoodRx’s discounts.
On May 9, 2022, as alleged in the complaint, investors began to learn the truth about the risks of GoodRx’s over dependence on Kroger (including the risk that, notwithstanding the Kroger Rx Savings Club, Kroger could unilaterally refuse to accept GoodRx’s discounts), when GoodRx revealed that, late in the first quarter of 2022, “a grocery chain had taken actions that impacted acceptance of discounts from most PBMs for a subset of drugs” and that this “impacted the acceptance of many PBM discounts for certain drugs at this grocer’s stores.” Further, according to the complaint, GoodRx acknowledged that this disruption “could have an estimated revenue impact of roughly $30 million” in the second quarter of 2022 - resulting in the Company announcing disappointing second quarter 2022 revenue guidance of only about $190 million. While Defendants did not identify the grocer by name, the complaint alleges that analysts and media outlets quickly recognized that the unnamed grocery chain was Kroger.
Following this news, the price of GoodRx common stock fell $2.78 per share, more than 25%, from a close of $10.75 per share on May 9, 2022, to close at $7.97 per share on May 10, 2022.
Then, on November 8, 2022, according to the complaint, Defendants provided further information on the severity of the revenue impact from the Kroger disruption - with the Company estimating that the “impact of the grocer issue on third quarter [prescription transactions revenue] was approximately $40 million” and that the Company expected “a combined $45 million to $50 million estimated impact to prescription transactions revenue” for the fourth quarter of 2022.
Following this news, the price of GoodRx common stock declined $1.18 per share, more than 22%, from a close of $5.24 per share on November 8, 2022, to close at $4.06 per share on November 9, 2022.
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Pamela A. Mayer
KAPLAN FOX & KILSHEIMER LLP
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E-mail: pmayer@kaplanfox.com
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KAPLAN FOX & KILSHEIMER LLP
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E-mail: lking@kaplanfox.com
