Block & Leviton LLP (blockesq.com) announces that it has filed a class action lawsuit against Keryx Biopharmaceuticals, Inc. (“Keryx” or the “Company”) (NASDAQ: KERX) and certain of its officers for violations of the federal securities laws.
Shares in Keryx have plunged nearly 39% since August 1, 2016 when the Company announced that due to a "production-related issue" with the Company’s only drug manufacturer, patients who use Keryx's kidney drug Auryxia (the Company's only marketed product) will face a supply interruption until at least October. Keryx also withdrew its full-year forecast regarding both sales and financial results. This news and the resultant stock drop has caused investors to lose tens of millions of dollars.
The case, brought on behalf of investors who purchased or otherwise acquired Keryx securities between September 2, 2013 and August 1, 2016 (the “Class Period”), alleges that the defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company intended to and did contract with only a single contract manufacturer; (2) that the Company lacked adequate inventory controls; (3) that at some point during the Class Period, defendants became aware but did not disclose that its contract manufacturer was experiencing difficulties in production; (4) that these production difficulties would cause the depletion of Keryx’s Auryxia inventory, and (5) that, as a result, the Company’s financial guidance and statements about Keryx’s business, operations, and prospects, were false and misleading.
By order dated July 19, 2018, the district court granted in part and denied in part defendants’ motion to dismiss the first consolidated amended complaint. Subsequently, plaintiffs filed a motion for class certification and a motion for leave to file a third consolidated amended complaint. In addition, defendants filed a motion for judgment on the pleadings. On September 23, 2019, the district court denied plaintiff’s motion for class certification and its motion for leave to file an amended complaint. In addition, the court granted defendants’ motion for judgment on the pleadings. Plaintiffs have appealed those rulings to the Court of Appeals for the First Circuit.