Embecta Corp. Class Action Lawsuit – EMBC

Introduction

A securities class action lawsuit has been filed by Levi & Korsinsky, LLP on behalf of plaintiff Harrison Apitz-Grossman against Embecta Corp. (NASDAQ: EMBC) and certain of its senior executives. The complaint covers investors who purchased or acquired Embecta common stock between November 25, 2025 and May 4, 2026 (the "Class Period"). The lawsuit alleges that defendants made materially false and misleading statements concerning Embecta's fiscal year 2026 revenue guidance and the strength of the company's U.S. pen needle business, while concealing that significant segment weakness made the company's guidance misleading and unattainable. When Embecta reported second quarter fiscal 2026 results on May 5, 2026, revealing a 14.4% year-over-year revenue decline and slashing full-year guidance, the stock plunged from $9.25 to $3.90 per share, a single-day loss of over 57.8%.

Company Profile

Embecta Corp. is a global medical device company focused on providing solutions for people living with diabetes. The company's product portfolio includes pen needles, insulin syringes, and safety injection devices, with pen needles and safety pen needles accounting for approximately 85% of Embecta's portfolio.

Class Period

November 25, 2025 – May 4, 2026

Investors who purchased or otherwise acquired Embecta Corp. (EMBC) common stock during the Class Period may be eligible to seek recovery under the federal securities laws.

Allegations

The complaint alleges that throughout the Class Period, defendants provided investors with materially false and misleading statements regarding Embecta's fiscal year 2026 guidance while concealing that the company's U.S. pen needle segment was experiencing significant competitive and market headwinds that made the guidance unattainable. When Embecta reported its fourth quarter and full year 2025 results on November 25, 2025, the company issued fiscal 2026 guidance calling for adjusted constant currency revenue to be flat to down 2% compared to 2025 levels, translating to an as-reported revenue range of $1.071 billion to $1.093 billion. CEO Devdatt Kurdikar stated that, in fiscal year 2026, the company intended to "maintain our global leadership position in our core product categories," while CFO Jacob Elguicze affirmed the guidance was "well aligned with the expectations established in our long-range plan."

According to the complaint, defendants continued reinforcing this narrative at the 44th Annual J.P. Morgan Healthcare Conference on January 14, 2026, where CEO Kurdikar described the pen needle business as "incredibly resolute" and emphasized the stability of the product portfolio despite external dynamics including GLP-1 adoption and pump usage. Kurdikar pointed to stable insulin pen prescriptions, a "slight positive trend" in new prescriptions for insulin pens, and the company's geographic diversification as evidence of the portfolio's durability. He further asserted that Embecta was the "unrivaled leader" in the pen needle market and cited data suggesting "a lot of concomitant use of GLP-1s with pen needles."

On February 5, 2026, when Embecta reported first quarter 2026 results, the complaint alleges defendants reaffirmed all previously provided guidance ranges, including revenue, adjusted operating margin, and adjusted earnings per share. CEO Kurdikar stated results were "largely consistent with our expectations," while CFO Elguicze systematically reaffirmed each guidance metric. The complaint alleges these statements were materially misleading because defendants knew or recklessly disregarded that segment weakness, particularly in the U.S. pen needle market, including competitive share losses concentrated at a single major customer, market volume softness in the retail channel, and the impact of patients not on preferred payer plans, was likely to disrupt both the company's second quarter 2026 results and its full-year revenue guidance.

The Truth Emerges

On May 5, 2026, Embecta published second quarter fiscal 2026 results that the complaint identifies as the alleged corrective disclosure. Revenue of $221.8 million represented a decline of 14.4% year-over-year on an as-reported basis, and 17.4% on an adjusted constant currency basis, dramatically worse than the guidance of flat to down 2%. The company slashed its fiscal year 2026 revenue guidance from a range of $1.071 billion to $1.093 billion down to $1.015 billion to $1.035 billion, a reduction of approximately $57 million at the midpoint. Adjusted earnings per share guidance was cut by roughly 40%, from $2.80 to $3.00 down to $1.55 to $1.75.

CEO Kurdikar acknowledged the results were "significantly below our expectations" and attributed the shortfall primarily to the U.S. business, citing increased competitive dynamics, share loss in pen needles concentrated at a single major customer, overall market volume softness for insulin pens and pen needles in the retail channel, and patients shifting to lower-cost purchasing channels. The pen needle category alone accounted for approximately $53 million, or roughly 70%, of the $75 million revenue guidance reduction. Kurdikar conceded that competitive share loss at the previously referenced customer was "a little bit deeper than we anticipated" and that the company was observing declines in insulin pen prescriptions that represented "more of a recent shift than certainly what we've seen over the past several years," directly contradicting the "incredibly resolute" characterization made just weeks earlier at the J.P. Morgan conference.

Market Reaction

The market response to Embecta's disclosures was immediate and severe. EMBC shares plummeted from a closing price of $9.25 on May 4, 2026 to $3.90 on May 5, 2026, a single-day decline of over 57.8%, or $5.35 per share. Multiple analysts downgraded the stock or slashed price targets in response. BTIG downgraded EMBC to Neutral from Buy, characterizing the results as a "major miss" with a significant "guidance cut." Wolfe Research published a note highlighting that the fiscal year 2026 EPS guide had been cut approximately 40%, while Mizuho cut its price target from $12.00 to $5.00, noting that "share recapture on lost retail share will take time to execute while competitive pressures from low-cost providers and to some extent GLP-1s are expected to persist."

Next Steps

●        Lead Plaintiff Deadline: August 17, 2026

●        After the lead plaintiff deadline, the Court will consider any lead plaintiff motions.

●        Defendants may file a motion to dismiss.

●        If the case proceeds, the Court may later consider class certification.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.

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