The LifeMD class action lawsuit is focused on the propriety of LifeMD’s statements on May 6, 2025, when the company reported its Q1 2025 financial results and raised its full year 2025 revenue and adjusted EBITDA guidance.
Among the reasons for the guidance raise, LifeMD said that it “created a category-defining competitive moat in virtual obesity care” and “[o]ur RexMD brand continues to perform exceptionally well, with consistent growth in both revenue and active patient count.” During the earnings call that day, LifeMD management also touted its collaborations with LillyDirect and NovoCare to improve access to obesity care patients without insurance coverage and assured investors that it “takes a relatively conservative view to revenue.”
The complaint alleges that LifeMD made false and misleading statements while failing to disclose crucial information to investors while insiders sold significant amounts of their LifeMD shares. More specifically, the complaint claims that LifeMD (1) materially overstated its competitive position and (2) was reckless in raising its 2025 guidance, because that it did not consider rising customer acquisition costs in its RexMD segment and costs related to the sale of drugs intended to treat obesity.
Investors learned the truth on August 5, 2025, when LifeMD surprised investors with its Q2 2025 financial results, missing consensus GAAP EPS and revenue consensus estimates, reduced revenue guidance given in May 2025 by about 6.7% and 7.3% on the low- and high-ends, respectively, and slashed its adjusted EBITDA guidance (also given in May) by about 13% and 12% on the low- and high-ends, respectively.
During the earnings call that day, management noted that the company’s weight management “has been impacted by a higher than anticipated refund rate, driven by patients either lacking insurance coverage for their medications or being unable to afford the out-of-pocket cost of branded therapies.”
Perhaps more seriously, as to RexMD, LifeMD said “we experienced a challenging second quarter, primarily due to temporary elevated customer acquisition costs in the highly competitive ED market.”
This news drove the price of LifeMD shares crashing $5.31 (-44%) on August 6, 2025.
CASE TIMELINE
