Robbins Arroyo LLP: Keryx Biopharmaceuticals, Inc. (KERX) Misled Shareholders According to a Recently Filed Lawsuit
January 05 2017 - 1:46PM
Business Wire
Shareholder rights law firm Robbins Arroyo LLP announces that a
shareholder derivative lawsuit was filed on behalf of Keryx
Biopharmaceuticals, Inc. (NASDAQCM: KERX) in the Commonwealth of
Massachusetts Superior Court, Suffolk County. The complaint is
brought against certain officers and directors of the company for
alleged breach of fiduciary duties, unjust enrichment, waste of
corporate assets, abuse of control, and gross mismanagement. Keryx
is a biopharmaceutical company that focuses on providing therapies
for patients with renal disease in the United States. Its product,
Auryxia, is an oral, absorbable, iron-based compound designed to
control serum phosphorous levels in patients with chronic kidney
disease on dialysis.
View this information on the law firm's Shareholder Rights
Blog:www.robbinsarroyo.com/shareholders-rights-blog/keryx-biopharmaceuticals-inc-jan-2017
Keryx Accused of Concealing Production Difficulties
Surrounding Its Drug Product
According to the complaint, Keryx officials schemed to
facilitate their violations of law and to conceal adverse
information concerning the company's operations, financial
condition, competitors, future business prospects, and internal
controls. The complaint alleges that Keryx officials misled
shareholders into believing that the company would contract with
multiple manufacturers to produce Auryxia. For example, Keryx
repeatedly referenced "third party manufacturers" and "contract
manufacturers" in its public filings. In so doing, Keryx officials
allegedly concealed the true risks associated with the
manufacturing and supply of Auryxia because Keryx contracted with
only a single manufacturer to produce its only marketed drug.
The complaint further alleges that Keryx officials failed to
disclose that: (1) the company contracted with a single contract
manufacturer, not multiple third party manufacturers, to convert
the active pharmaceutical ingredient ("API") of Auryxia to the
finished drug product; (2) the company was experiencing
production-related difficulties in converting API to the finished
drug product; (3) these difficulties resulted in decreased
production yields of finished drug product; (4) the company would
necessarily exhaust its reserve of finished drug product; and (5)
the company lacked adequate inventory controls. On August 1, 2016,
Keryx revealed that the company would halt the distribution of
Auryxia until October 2016 due to production difficulties on the
part of its only contract manufacturer, and that Keryx was
withdrawing its financial guidance for 2016. On this news, Keryx
stock fell $2.64 per share, or 35.8%, to close at $4.72 per share
on August 1, 2016.
Keryx Shareholders Have Legal Options
Concerned shareholders who would like more information about
their rights and potential remedies can contact attorney Darnell R.
Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the
shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in
shareholder rights law. The firm represents individual and
institutional investors in shareholder derivative and securities
class action lawsuits, and has helped its clients realize more than
$1 billion of value for themselves and the companies in which they
have invested.
Attorney Advertising. Past results do not guarantee a similar
outcome.
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version on businesswire.com: http://www.businesswire.com/news/home/20170105006329/en/
Robbins Arroyo LLPDarnell R. Donahue(619) 525-3990 or Toll Free
(800) 350-6003DDonahue@robbinsarroyo.comwww.robbinsarroyo.com
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