According to the Complaint, throughout the Class Period and in the IPO’s offering documents, Defendants made false and/or misleading statements and/or failed to disclose that: (i) agilon’s business model, purportedly focused on patient care rather than fee-for-service, was unable to provide the cost savings and the mitigation of medical expenses represented to investors; (ii) agilon’s purported historical cost savings portrayed to investors in connection with the IPO were short-term effects of the COVID-19 pandemic and not indicative of the cost controls and incentives ostensibly inherent in agilon’s business model; (iii) as a result of the above, agilon suffered from a material, undisclosed risk of higher utilization and medical claims rates once the short-term effects of the COVID-19 pandemic waned and the providers in agilon’s network were poised to experience an upsurge in patient demand for medical services materially above the historical rate portrayed in the IPO offering documents; (iv) agilon suffered from materially higher utilization and medical claims rates throughout the Class Period as compared to prior year periods as patients who had delayed elective procedures and otherwise utilizing medical benefits during the COVID-19 pandemic sought treatment; (v) agilon’s business model, purportedly focused on patient care rather than fee-for-service, had not insulated agilon from these adverse cost trends as claimed by defendants, and agilon was in fact suffering cost trends that were up to 3x higher in key areas like specialist costs, outpatient surgeries, and Part B drugs as compared to 2022; (vi) these material, adverse cost trends were not moderating, but in fact worsening as agilon progressed through the year; (vii) agilon had suffered tens of millions of dollars in excess costs related to patient supplemental benefits and over $60 million in excess costs related to agilon’s core medical services that had not been disclosed to investors; (viii) agilon had suffered tens of millions of dollars in prior year development claims that had not been revealed to investors; (ix) agilon’s historical medical margins and adjusted EBITDA had been artificially inflated and materially misrepresented to investors; and (x) agilon’s 2023 medical margin and adjusted EBITDA guidance, its 2024 cash flow guidance, and its 2026 long-term guidance was not achievable and lacked a reasonable basis in fact.

On November 2, 2023, agilon revealed a significant deterioration in its medical margins coming in at just $108 million for the quarter, far below analyst consensus estimates, due in part to $9 million in previously unreported prior year claims. agilon further disclosed it suffered $6 million in quarterly adjusted EBITDA, which also missed analyst estimates. On this news, the price of agilon common stock fell more than 13%.

Then, on January 5, 2024, agilon revealed that it had suffered dramatically higher prior medical expenses than previously revealed and, as a result, agilon was lowering its 2023 expected medical margin to a range of $340 million to $360 million, or approximately $110 million (24%) below the already substantially reduced guidance and $200 million (36%) below agilon’s original guidance. agilon also revealed that adjusted EBITDA had fallen to a range of $69 million to $55 million in 2023 and agilon was withdrawing its 2026 guidance, which had been reaffirmed by defendants only a month-and-a-half previously, and provided a poor 2024 outlook which included just $560 million to $600 million in medical margin and an adjusted EBITDA range of $40 million to $70 million. On this news, the price of agilon common stock fell nearly 29%.

Finally, on February 27, 2024, agilon disclosed that its 2023 medical margin had in fact come in at just $299 million for the year – far lower than the range of $340 million to $360 million provided just a few weeks prior. agilon also revealed: (i) an additional $38 million in net costs from the fourth quarter and $13 million in costs attributable to prior periods; (ii) a $263 million net loss for 2023 and a negative $95 million adjusted EBITDA for the year – a far cry from the “meaningful step up in profitability” to a potential $90 million adjusted EBITDA gain originally claimed by defendants during the Class Period; and (iii) agilon slashed its 2024 medical margin guidance by 27% at the midpoint to a range of $400 million to $450 million and its 2024 adjusted EBITDA guidance from a $40 million to $60 million gain to a $15 million to $60 million loss. On this news, the price of agilon common stock fell more than 7%, further damaging investors.

If you wish to serve as lead plaintiff, you must move the Court no later than May 20, 2024. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.

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