#United States #New York #Class Action #Pomerantz LLP #Fortrea Holdings

Pomerantz Law Firm Files Class Action Against Fortrea Holdings

The Pomerantz Law Firm has recently announced a significant legal development involving Fortrea Holdings, Inc., a global contract research organization (CRO). A class action lawsuit has been filed in the United States District Court for the Southern District of New York against Fortrea and some of its key officers, registered under docket number 25-cv-04630. This legal action represents the interests of all individuals and entities, except for the defendants, who purchased or otherwise acquired Fortrea securities during the designated Class Period, which extends from July 3, 2023, to February 28, 2025.

Allegations of Securities Fraud

The crux of the lawsuit centers around allegations that the defendants violated federal securities laws. The plaintiffs are seeking to recover damages attributed to supposed misleading and false statements regarding Fortrea's business operations and market prospects during the Class Period. Specifically, the lawsuit aims to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, along with Rule 10b-5 that was enacted under this act.

Investors who acquired Fortrea securities within the aforementioned timeline have until August 1, 2025, to file an application with the court to be designated as Lead Plaintiff in this class action. Interested parties can obtain a copy of the complaint from the Pomerantz Law Firm’s website and are encouraged to initiate contact for further discussion.

Overview of Fortrea Holdings

Fortrea Holdings emerged following its spin-off from Labcorp Holdings Inc., where it functioned as the clinical development and commercialization services segment. Since its establishment as an independent publicly traded entity, Fortrea has claimed its value lies in its capability to provide tailored solutions in biopharmaceutical product and medical device development. The company emphasizes its size, operational agility, and financial flexibility in achieving these goals.

Upon its separation from Labcorp, Fortrea entered into Transition Services Agreements (TSAs) which involved the outsourcing of certain services back to Labcorp. This collaboration was intended to support Fortrea in transitioning into operational independence. Fortrea assured the market that it had devised strategic plans to exit these transitional agreements to bolster cost savings and benefits over time.

Fortrea set forth ambitious targets, aiming for an adjusted EBITDA margin of approximately 13% for the financial year 2025. This target, however, was readjusted in August 2024, indicating a lowered expectation to the range of 11% to 12%. The rationale provided maintained that this adjusted outlook would represent a considerable improvement compared to previous figures.

Misleading Statements and Market Reactions

Throughout the class period, the complaint claims that Fortrea's leadership disseminated fundamentally false information regarding operational profits and business strategies. Defendants allegedly overstated the revenue potential from ongoing projects and the anticipated cost savings from exiting TSAs, thus rendering their financial forecasts significantly inflated.

Market analysts reacted to these claims with skepticism. In late September 2024, investment bank Jefferies downgraded Fortrea's stock from a buy to a hold, citing concerns over the sustainability of its business model and highlighting pressure on funding within the biotechnology sector. Following the downgrade, Fortrea saw a marked drop in its stock price, which plummeted further after Baird Equity Research issued a similar downgrade due to the cancellation of important scheduled conferences.

On March 3, 2025, Fortrea reported disappointing results for both its fourth quarter and the complete 2024 fiscal year, acknowledging that its projected revenue was misaligned with previous guidance. The company attributed underperformance to the dynamics of its older contracts being less profitable than anticipated.

The resulting drop in Fortrea's stock value culminated in a significant decline, indicating substantial market distrust against the company’s operational metrics and future outlook.

The Role of Pomerantz LLP

Founded by Abraham L. Pomerantz, recognized as a pioneer in class action litigation, the Pomerantz Law Firm has a notable history of advocating for victims of securities fraud. With an extensive footprint in major cities worldwide, the firm continues to push for justice on behalf of class members affected by corporate misconduct. The current lawsuit against Fortrea Holdings is emblematic of its enduring commitment to protect investors’ rights and pursue accountability within the corporate sector.

For those affected or seeking additional information about participating in the class action against Fortrea Holdings, contact details for Pomerantz LLP are available, including a dedicated hotline and website where further inquiries can be made.