TransEnterix, Inc. (Nasdaq: TRXC)
A class action lawsuit has been filed in the United States District Court for the Eastern District of North Carolina on behalf of purchasers of TransEnterix, Inc. (Nasdaq: TRXC) common stock during the period between February 10, 2016 to May 10, 2016, inclusive (the “Class Period”).
The complaint charges TransEnterix and certain of its officers and directors with violations of the Securities Exchange Act of 1934. TransEnterix is a medical device company that seeks to use flexible instruments and robotics to improve the outcome of minimally invasive surgery, including through its SurgiBot System (“SurgiBot”), a single-port, robotically enhanced laparoscopic surgical platform. On June 1, 2015, the Company announced that it had submitted its 510(k) application to the United States Food and Drug Administration (“FDA”) seeking “substantial equivalence” approval that would enable TransEnterix to begin marketing and selling the SurgiBot in the United States.
The complaint alleges that during the Class Period, 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 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. As a result of these false statements and/or omissions, TransEnterix common stock traded at artificially inflated prices during the Class Period, reaching as high as $5.69 per share.
On April 20, 2016, the Company issued a press release announcing its receipt of a response from the FDA on its SurgiBot 510(k) submission, which stated that “the FDA has determined that the SurgiBot™ System does not meet the criteria for substantial equivalence based upon the data and information submitted by TransEnterix in its 510(k) submission.” On this news, the price of TransEnterix stock fell $2.47 per share, or more than 50%, to close at $2.27 per share on April 21, 2016.
Then on May 20, 2016, the Company issued a press release stating that it “expect[ed] to have further discussion with the FDA, but currently believes that a new 510(k) submission would be required to obtain clearance,” that it was reprioritizing its near-term regulatory efforts to focus on another submission, and that, as a result, it “ha[d] taken actions to reduce headcount and investment related to the SurgiBot.” On this news, the price of TransEnterix common stock fell another 10% to close at $1.84 per share on May 11, 2016.
If you are a current shareholder and/or purchased stock between February 10, 2016 to May 10, 2016, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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