Organogenesis, Inc. is a regenerative medicine company that develops, manufactures, and commercializes solutions for the advanced wound care and surgical and sports medicine markets in the U.S.

The original Complaint alleges that throughout the Class Period, Organogenesis was a Company with only one commercially available product, Apligraf, a skin replacement therapy used for severe skin wounds. Apligraf is described by Organogenesis as having a structure similar to human skin and as a "skin construct." The product's human skin-like properties allow this product to be used by doctors to aid in the healing of certain types of skin ulcers and other epidermal injuries. Defendants were well aware that the Company's business model was entirely dependent upon their ability to mass-produce Apligraf and market it to physicians as an "off-the-shelf," cost-effective product that doctors could use on patients absent hospitalization. Thus, while the Company encountered some difficulties in manufacturing and marketing Apligraf during the first half of 1999, by the inception of the Class Period, Defendants assured investors that Organogenesis maintained the expertise and ability to manufacture sufficient quantities of Apligraf so that it was foreseeable that the Company could achieve economies of scale and achieve profitability through the sales of only this product, that the Company maintained marketing agreements with partners such as Novartis, which would allow Organogenesis to obtain the marketing support necessary to sell sufficient quantities of Apligraf, while at the same time retaining enough of the revenue split in these deals to fund operations and achieve profitability, and that between the Company's marketing agreements with Novartis and others, and through other foreseeable sources of available debt and equity, Organogenesis could foreseeable achieve profitability and sufficiency.

Throughout the Class Period, Plaintiff and other members of the Class were led to believe that Organogenesis was able to manufacture Apligraf in sufficient quantities and that other sources of funding were available such that the Company would be able to achieve profitability in the foreseeable near-term. Defendants consistently reported that Organogenesis' results were "consistent with the transition in progress from a research focused company to a research based operating company with a novel medical product in introduction phase," and that the Company had necessary and available funding sources, from foreseeable sales of debt and equity to both private and public investors which would allow the Company to achieve Defendants' plan for sufficiency. Central to this plan was also a key agreement with Novartis, Organogenesis' Apligraf marketing partner, which purportedly allowed Defendants to access at least $20 million through the exercise of a "put" option. This agreement purportedly allowed Defendants to raise this money at any time, and thereby maintain a large mega-million "safety net" for the Company.

Unbeknownst to investors, however, throughout the Class Period, the Company was suffering from a host of undisclosed adverse factors which negatively impacted its business and which would cause it to report declining financial results, materially less than the market expectations Defendants had caused and cultivated. In particular:

1) Defendants could not achieve profitability through the sale of Apligraf under the terms, or even the revised terms, of the Novartis marketing agreement, which did not provide Organogenesis with enough of the revenues or profits provided through such Apligraf sales to offset the extremely high cost of production or to offset other undisclosed manufacturing problems such as defective products and recalls; 2) Undisclosed problems related to the manufacture and marketing of Apligraf were leading to even higher costs and further reducing profitability. Manufacturing problems and delays were retarding production scale, and marketing issues were reducing sales. As investors would only learn following the Class Period, the Company's own sales force was encountering resistance throughout that time concerning the cost and complexity of its products and the actual and/or perceived difficulties in physician reimbursement for Apligraf; 3) Organogenesis was underfunded and there was no reasonable basis to report that the Company could foreseeably fund operations throughout the Class Period, based on available sources of loans, debt and/or equity sales. Moreover, as Defendants were well aware but failed to disclose, it was not true that the Company could force Novartis to provide the full complement of its funding as Defendants consistently represented, as certain undisclosed conditions existed. Organogenesis could not meet conditions precedent to Novartis' requirement to provide at least $10 million of its purported commitment to Organogenesis; and 4) High management turnover at the Company was having and would continue to have a disruptive effect on the operations and oversight of Organogenesis, such that it was also not foreseeable at any time during the Class Period that Organogenesis would be able to achieve profitability in the near-term or to attain guidance sponsored and/or endorsed by Defendants.

Thus, Defendants lacked any reasonable basis to claim that Organogenesis was operating according to plan, that sufficient sources of funding were achieved and/or available to Organogenesis or that the Company could maintain profitability or even remain a viable entity in the foreseeable near-term.

Defendants were motivated to and did conceal the true operational and financial conditions of Organogenesis, and materially misrepresented and failed to disclose the conditions that were adversely affecting Organogenesis throughout the Class Period, because it enabled insiders, including certain Defendants, to sell over 6.2 million shares of Company stock and/or securities valued at over $68.8 million, prior to any proper disclosure to the market.

Defendants' scheme also, ultimately, allowed Defendants Erani and Ades and their family members to improperly acquire the remaining assets of Organogenesis through a leveraged buyout through bankruptcy proceedings -- after Defendants' actions drove the Company into bankruptcy and after they sufficiently interfered with these proceedings so as to guarantee that Erani and Ades and their family members acquired total domination and control over what was left of Organogenesis. Thus, through their illegal and improper actions which ultimately forced the Company into Chapter 11, Defendants not only were able to wipe out the equity interest of all of the Company's outside shareholders, but they were also able to renegotiate their agreement with Novartis -- which as Defendants knew or recklessly disregarded, caused the Company to lose money on every unit sale of Apligraf.

On July 20, 2004, the Judge Joseph L. Taur issued the electronic Order approving the Stipulation and Order consolidating actions, appointing lead Plaintiff and approving lead Plaintiff's selection of lead Counsel and liaison Counsel. On October 25, 2004, the Plaintiffs filed a Consolidated Amended Class Action Complaint, and the Defendants responded by filing motions to dismiss in January 2005. On July 20, 2005, the Court entered the Order allowing PricewaterhouseCoopers LLP's motion to dismiss, denying certain individual Defendants’ motion to dismiss, and allowing other individual Defendants’ motion to dismiss with respect to Plaintiffs' claims against Defendant Alan Ades only.

On May 10, 2006, the Court entered the Order and Final Judgment, signed by U.S. District Judge Joseph L. Tauro, dismissing the action as to Defendant PricewaterhouseCoopers, LLP. Also that day, the lead Plaintiffs filed a motion to certify the class. On June 7, 2006, the Court entered Order and Final Judgment as to Defendant Alan Ades.

According to a press release dated March 16, 2007, a federal judge in Boston refused to certify a class in a securities fraud lawsuit against former officers and directors of Organogenesis, citing the inadequacy of the firm seeking to be the Plaintiff's lead Counsel. Milberg, Weiss & Bershad LLP, one of the most prominent class-action firms in the country, and two of its leading partners were indicted in May by a federal grand jury on charges of paying millions of dollars in illegal kickback to lead Plaintiffs in other class actions. The firm has offices in New York and Los Angeles. One of the indicted partners, Steven Schulman, signed the amended Complaint in the Organogeneis case, though the firm contended that he was no longer litigating it, an assertion that U.S. District Court Judge Joseph Tauro found "disturbing." Tauro also noted Milberg Weiss' "repeated failure" to oversee the class certification process.

On April 19, 2007, a Stipulation of Voluntary Dismissal with Prejudice was filed. According to the Stipulation, pursuant to Rule 41(a)(1)(ii) of the Federal Rules of Civil Procedure, the parties in this case stipulate and agree that John Bowie, Richard Conen, Bruno Hofmann, and Richard Madigan hereby dismiss their actions with prejudice, and waive any rights of appeal. The civil case is now terminated.