CASES
MannKind Corp.
Class Period: Jun 25, 2010 to Jan 19, 2011
Lead Plaintiff Deadline: Apr 1, 2011 + Deadline passed
Summary of Case:
A securities class action has been filed against MannKind Corp.(MNKD) ("MannKind" or the "Company") on behalf of all securities purchasers from June 25, 2010 through January 19, 2011, inclusive ("Class Period") in the United States District Court for the Central District of California.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding MannKind's business and prospects for AFREZZA. Specifically, defendants continuously hyped AFREZZA for the treatment of adult patients with Type 1 and Type 2 diabetes for the control of hyperglycemia, telling market observers that AFREZZA was one of the most valuable products in the history of drug making, while failing to disclose that MannKind's platform would require better information for patients about the risks of AFREZZA. As a result of defendants' false statements, MannKind's stock traded at artificially inflated prices during the Class Period, reaching a high of $9.83 per share on January 18, 2011.
Then, on January 19, 2011, shortly before the market closed, MannKind issued a press release announcing that the Company had received a complete response letter from the U.S. Food and Drug Administration ("FDA") pertaining to the Company's New Drug Application for AFREZZA. The FDA deferred approving AFREZZA and requested two additional clinical trials with the inhaler. Prior to this news being released on January 19, 2011, MannKind's stock began dropping as news of the FDA deferral leaked into the market. The complaint alleges that, in fact, the FDA notice had been received on January 18, 2011, and defendants had held off informing shareholders. Trading was halted in MannKind stock on January 19, 2011, and when trading resumed the next day, MannKind's stock plunged $2.94 per share to close at $6.17 per share on January 20, 2011, a one-day decline of 32% on volume of over 34 million shares.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company failed to disclose that the FDA had issues with the clinical utility of AFREZZA which might inhibit approval; (b) AFREZZA was a riskier product than investors were led to believe and would require additional risk disclosure to patients if approved; (c) the reasons for the FDA's delay in approval of AFREZZA prior to the beginning of the Class Period were not limited to the inspection of the European facility as defendants had stated; and (d) given these factors, defendants knew it was highly doubtful that FDA approval would be forthcoming.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.