Maurice Blackburn Latest Law Firm to Propose Class Action re Shareholders of Sirtex Medical
Thursday 3 August 2017 @ 9.58 a.m. | Corporate & Regulatory | Legal Research | Trade & Commerce
ASX-listed Sirtex Medical (the company) is reported to be facing two class actions. The actions arise over allegations that the company, a biotech company, engaged in misleading and deceptive conduct relating to missed sales forecasts for the years 2016/17 which are said to have initiated a plunge in the company's share price. Two law firms, namely, William Roberts Lawyers and Maurice Blackburn Lawyers have each invited the company's shareholders to join separate class actions against the company.
The company manufactures and sells individual doses of a radioactive internal treatment for inoperative liver and colorectal cancer. Its principal markets are the USA, the European Union and Australia.
The William Roberts Class Action
On their website William Roberts Lawyers state that they propose to commence a class action against the company in the Federal Court of Australia, "subject to sufficient interest" and that the proposed class action is on behalf of shareholders who purchased shares in the company during the period of 24 August 2016 to 9 December 2016. The proposed class action is to be funded by Litigation Lending Services and the claim will allege breaches of the company's "continuous disclosure obligations" and engagement in "misleading or deceptive conduct concerning its dose sales guidance for the 2017 financial year".
It is alleged that the company had no reasonable basis for a statement released in August 2016, that it ". . . expected double-digit sales growth for its SIR-Spheres Y-90 radiation therapy for 2016/17". In fact the company's shares plunged 37 percent on 9 December 2016 after the company warned of a deterioration in sales and earnings. Dose sales in the first half of the 2016/17 financial year actually only grew by only 5.6 percent.
The SIR-Spheres Y-90 are a targeted radiation therapy and are the company's lead product. They are approved for supply in Australia, the European Union and the USA. They account for almost all of the company's revenues. It is contended that the company's own communications to the market after 9 December 2016 confirm that the company had ". . . a very short window of visibility over sales" raising the question of how could the company then reasonably predict double-digit sales growth over a six-month or 12-month period? Based on this, William Roberts argue that the company's share price was artificially inflated based on misleading disclosures to the market.
The Maurice Blackburn Action
Maurice Blackburn has also announced a separate class action against the company, which is being run in partnership with litigation funding organisation IMF Bentham, on behalf of shareholders following an announcement of deteriorating earnings and sales growth, followed by a further announcement confirming an external investigation into the share trading activities of the company's then-CEO, Gilman Wong.
Maurice Blackburn indicate that the proposed shareholder class action is expected to
". . . allege contraventions of the ASIC Act, Corporations Act and the Australian Consumer Law in seeking to establish that [the company] engaged in misleading or deceptive conduct and/or breached its continuous disclosure obligations".
In its media statement, Maurice Blackburn state that:
". . . following the 37 percent one-day plunge in [the company's] share price on 9 December, the shares fell another nine percent when [the company] later said it was investigating the share trading activities of then CEO Gilman Wong who was subsequently sacked by the company."
SBS news quotes Maurice Blackburn's national head of class actions, Andrew Watson, as saying that the events were deeply troubling, and the company had serious questions to answer about its conduct and the conduct of Mr Wong:
How to be Included in the Class Actions
Any shareholders who purchased Sirtex shares between 24 August to 19 December 2016, may be eligible to participate in the class actions and can register at the respective William Roberts or at the IMF Bentham websites.
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