Shares of Picard Medical, Inc. (NYSE: PMI) plummeted more than 34 percent in early Thursday trading after the U.S. Securities and Exchange Commission confirmed it had opened a formal inquiry into the biopharmaceutical company's disclosure practices surrounding its Phase III cardiovascular device trials, sources familiar with the matter told reporters. The development follows weeks of mounting pressure from securities law firms, including Bragar Eagel & Squire, P.C., which has been urging investors to come forward ahead of an April 3rd deadline to assert their rights in a potential class-action suit.
The SEC's Division of Enforcement sent document preservation notices to Picard Medical's headquarters in San Diego, California, on Wednesday evening, requesting internal communications related to the company's 2025 investor presentations and its Q3 earnings call, in which executives touted promising interim data from the APEX-2 cardiovascular stent trial. Plaintiffs' attorneys allege that Picard Medical concealed a significant adverse event rate among trial participants — a claim the company has consistently denied. 'What we are seeing is a pattern of selective disclosure that misled retail and institutional investors alike,' said Lawrence Eagel, a founding partner at Bragar Eagel & Squire, speaking Thursday morning outside the firm's New York offices.
The timing of the SEC's move is significant. Picard Medical was already navigating turbulence after a January report by short-seller firm Citron Research questioned the statistical methodology underpinning its APEX-2 data. That report temporarily knocked 18 percent off the stock's value, though PMI recovered much of those losses after issuing a rebuttal in February. Thursday's confirmation of federal scrutiny, however, has rattled even long-term institutional holders. Vanguard and BlackRock, each holding approximately 6 percent of outstanding shares according to recent 13-F filings, declined to comment on their positions.
Health sector analysts noted that the controversy arrives at a particularly sensitive moment for medical device oversight in the United States. The FDA's Center for Devices and Radiological Health has been under bipartisan congressional pressure to tighten post-market surveillance requirements following a series of high-profile device recalls in 2025. Representative Frank Pallone Jr. of New Jersey, the ranking Democrat on the House Energy and Commerce Committee, called for a joint congressional hearing, stating that 'the Picard Medical situation exposes exactly the kind of disclosure gap that our oversight framework must close.' Picard Medical's board convened an emergency session Thursday morning and retained outside counsel from Skadden, Arps, Slate, Meagher & Flom LLP.
The company issued a brief statement shortly before market open, asserting full cooperation with regulators and reaffirming confidence in its clinical data. 'Picard Medical stands behind the integrity of its research and remains committed to transparency with all stakeholders,' the statement read. Analysts at Jefferies downgraded PMI to 'Underperform' and slashed their price target from $47 to $19, citing 'binary regulatory risk and litigation overhang that could persist well into 2027.' The April 3rd investor deadline is now expected to trigger one of the largest healthcare securities class actions filed in the Southern District of New York this year.