A securities class-action filed against Puma Biotechnology Inc. resulted in a split verdict by a federal jury that allowed investors to recover $4.50 per share in damages.
Following a two-week trial and four days of deliberations, a jury in a California federal court found on Feb. 4 that Puma and its chief executive, Alan Auerbach, had made a false statement about the safety and effectiveness of its breast cancer drug prior to its approval that would later result in a drop in the company’s share price.
The jury in the U.S. District Court for the Central District also found in favor of Puma with respect to three of four statements made in a July 2014 investor conference call alleged by plaintiffs to have been “false and misleading.”
The result: Shareholders who purchased Puma stock between July 22, 2014, and May 13, 2015, may recover $4.50 a share, according to court documents.
The rare securities class-action trial resulted in claims of victory from lawyers representing both plaintiff and defendant.
Robbins Geller Rudman & Dowd, the San Diego-based law firm arguing the case on behalf of shareholders led by a pension fund in the United Kingdom, said the verdict means shareholders are owed up to $100 million.
Attorneys with downtown-based Latham & Watkins, representing Puma and Auerbach, said the $4.50 per share represents less than 5 percent of the claimed damages. The attorneys also said roughly 10 million Puma shares traded during the period eligible for the claim, with only a small percentage of shareholders expected to submit proof of claims sufficient to recover damages.
“We are extremely pleased with the jury verdict,” Auerbach said in a statement. “We are excited to return our focus to running the business, growing sales and providing our product to patients suffering from HER-2 positive breast cancer.”
Puma disagrees with the jury verdict on the one false statement claim and intends to file an appeal.
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