Misleading and deceptive conduct, lax disclosure alleged following 37% slump in share price
Sirtex Medical Limited (ASX: SRX) faces a proposed shareholder class action to be run by specialist litigation firm William Roberts Lawyers with the financial backing of the long standing and experienced litigation funder, Litigation Lending Services, which since 1999 has funded around 200 matters.
Shareholders in ASX-listed healthcare company Sirtex Medical Limited who suffered losses following a downgrade of the company’s sales forecasts in December 2016 have a new avenue for financial redress, with the launch of a proposed class action.
Sirtex Medical manufactures and distributes liver cancer treatments utilising small-particle technologies. Dose sales of its lead product SIR-Spheres Y-90 (SIR) - a targeted radiation therapy approved for supply in Australia, the EU and US - account for almost all Sirtex’s revenues.
The proposed claim will allege that Sirtex engaged in misleading and deceptive conduct and breached its continuous disclosure obligations when it forecast double-digit growth in SIR dose sales for FY17 on 24 August 2016 and then reaffirmed this guidance later in the year, despite lacking reasonable grounds for doing so.
It was not until 9 December 2016 that Sirtex issued a downward revision of dose sales forecasts to the market, triggering a 37% slump in its share price to $16.00 at the day’s close. In its results for the half-year to 31 December 2016 the company reported dose sales growth of only 5.6%.
Principal at William Roberts Lawyers, Bill Petrovski, said Sirtex shareholders who bought shares after 24 August 2016 and still held some of or all those shares on 9 December had every right to feel aggrieved at their losses.
“We contend that Sirtex never had any reasonable basis for leading investors to believe that it would record double-digit growth in sales of its primary revenue-earner in FY17,” Mr Petrovski said.
“The company’s own communications to the market following 9 December 2016 confirm that it had a very short window of visibility over sales. How could it then reasonably predict double-digit sales growth over a six-month or 12-month period?
“It is our view that Sirtex’s share price was artificially inflated based on misleading disclosures to the market. Shareholders who suffered losses as a result may seek compensation for their losses from the company” he said.
This proposed claim is open to shareholders who bought Sirtex shares in the period 24 August to 9 December 2016.
A decision on whether to proceed with this action will be contingent on the number of shareholders signing on to the action with LLS and William Roberts, and the total claim size being large enough.
CEO of LLS, Stuart Price, said: “Subject to sufficient interest from affected Sirtex shareholders, LLS will fund the claim and provide shareholders with an avenue to seek redress from the company”.
Eligible shareholders who wish to join the proposed class action will need to register their interest on http://www.litigationlending.com.au/sirtex.html or http://www.williamroberts.com.au/Class-Actions/Sirtex-Class-Action.