According to the complaint, TransEnterix is a medical device company that seeks to use flexible instruments and robotics to improve the outcomes of minimally invasive surgery. Of relevance is the company’s focus on the development and commercialization of the SurgiBot System (“SurgiBot”), a single-port, robotically enhanced laparoscopic surgical platform. On June 1, 2015, the company issued a press release announcing that it had submitted its 510(k) application to the United States Food and Drug Administration (“FDA”) for the SurgiBot.
The complaint alleges that throughout the Class Period, the defendants issued false and misleading statements and/or failed to disclose adverse information regarding key aspects of the company's business. Specifically, the complaint alleges that the defendants failed to disclose deficiencies within the company’s 510(k) submission regarding the SurgiBot that undermined the likelihood that the SurgiBot would receive FDA clearance, which would leave the company unable to commercialize the SurgiBot in 2016 and would impair the company’s ability to obtain approval for and commercialize its other robotic surgery platform in the United States.
According to the complaint, after the market closed on April 20, 2016, the defendants shocked investors when the company revealed that the FDA notified TransEnterix on April 19, 2016 that the FDA had determined the SurgiBot “does not meet the criteria for substantial equivalence based upon the data and information submitted by TransEnterix in its 510(k) submission.”
Following this news, the price of TransEnterix stock dropped. After closing at $4.74 on April 20, 2016, the stock opened at $1.57 per share on April 21, 2016, fell to a low of $1.28 and ultimately closed at $2.27, a decline of more than 50%, on high trading volume of more than 21.5 million shares.
Then, the complaint alleges that on May 24, 2016, the company further shocked the market when it announced that it was “reprioritiz[ing] its near-term regulatory efforts” and shelving the SurgiBot. Instead of pursuing approval and commercialization for the SurgiBot, which would require a new 510(k) submission, the defendants revealed the company would now “focus [its] resources on the commercialization of and regulatory clearance for the ALF-X System.”
Following this news, the price of TransEnterix stock dropped the following day. After closing at $2.06 per share on May 10, 2016, the stock fell more than 10% to close at $1.84 on May 11, 2016.
If you are a member of the class described above, you may no later than August 1, 2016 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
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