Affymax Inc
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Affymax Inc Securities Settlement
The lawsuit was settled for $6.5 million in cash. The following is a summary of the proceedings in this lawsuit: ‘The Court handling this Action is the United States District Court for the Northern District of California, and the case is known as Bartelt v. Affymax, Inc., Case No. 3:13 CV 01025 (WHO). On May 21, 2013, the Court appointed Tommy Jay Carter to represent the Class as Lead Plaintiff. The Defendants in this Action are Affymax, John A. Orwin, Herbert C. Cross, Anne-Marie Duliege, and Jeffrey H. Knapp. This Action alleges violations of the Federal Securities Laws (specifically Sections 10(b) and 20(a) of the Exchange Act (15 U.S.C. §78j(b) and 78(t)(a)) and Rule 10b-5 promulgated thereunder (17 C.F.R. §240.10b-5)) against Defendants. Affymax is a publicly traded Delaware corporation with its principal place of business located in Palo Alto, California. Affymax is a pharmaceutical company whose primary drug offering is peginesatide (trade name OMONTYS, formerly Hematide). OMONTYS was approved by the FDA for treatment of anemia due to chronic kidney disease (CKD) in adult patients on dialysis. During the Settlement Class Period, Affymax common stock traded on NASDAQ Stock Exchange (NASDAQ) under the ticker symbol AFFY. Lead Plaintiff alleges that, during the Settlement Class Period, Affymax stock price was artificially inflated as a result of a series of untrue or materially misleading statements regarding the safety of OMONTYS to treat anemia in adult patients on dialysis with CKD. Lead Plaintiff further contends that Defendants made these statements knowing them to be false or misleading, or recklessly disregarding their false or misleading natures, and that investors suffered injury as a result of the alleged inflation. On January 21, 2014, the Court issued an order dismissing claims related to the period of August 8, 2012 through February 11, 2013. In effect, the Court held that anyone who purchased shares during this earlier period did not have a viable claim against any of the Defendants. Accordingly, only Class Members that purchased shares between February 12, 2013 and February 22, 2013 have claims which the Court has sustained and will recover for their recognized losses associated with the misrepresentations and omissions alleged in the Complaint under this Settlement. Class Members in the earlier period will be awarded a recognized loss based on a flat rate for their right to appeal in exchange for their release of claims against the Defendants. Because there are no new facts which would support a reversal of the Order on the amended complaint and there is no apparent error in the Court January 21, 2014 Order, an appeal from the Order was not taken. Before agreeing to the Settlement, Plaintiffs Counsel conducted extensive investigation and research into the merits of the Action. This investigation has included consultation with experts concerning the amount of damages suffered by the Class; interviews of Confidential Witnesses who previously worked at Affymax; detailed review of Food & Drug Administration documents (FDA), including consultation with a FDA information expert; detailed reviews of Affymax public filings, SEC filings, press releases, and other public statements; review of analyst reports, financial analysts, and industry analysts relating to Affymax; and research of the applicable law with respect to the claims asserted in the complaints filed in the Action, and the potential defenses thereto. Additional investigations were conducted subsequent to the issuance of the Court January 21, 2014 Order, but no new facts were ascertained that would support reversal of the Court Order. On May 8, 2014, the Parties participated in a day-long mediation presided over by the Honorable Layn R. Phillips (Ret.) a former United States District Judge. During these negotiations, the Parties discussed, among other things, the respective claims and defenses, damage analyses, legal analyses, the evidence to be offered by the Parties at trial, and other important factual and legal issues. After a full day of arms-length negotiations supervised by Judge Phillips, the Parties reached an agreement to settle the Action subject to final documentation and Court approval. These negotiations resulted in the agreement to settle all claims of the Class against the Defendants, i.e., the Stipulation, entered into on July 2, 2014. Lead Counsel believes that the claims asserted in the Action have merit and that the evidence developed to date in the Action supports the claims asserted therein. Lead Counsel assert, and believe the Class would present supporting evidence at trial establishing liability against the Defendants under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. However, Lead Counsel recognizes and acknowledges the expense and length of continued proceedings, trial, and appeals, and has taken into account the uncertain outcome and the risk of any litigation, especially complex actions such as here. Lead Counsel is also mindful of the inherent problems of proof under, as well as the defenses to, the federal securities laws violations asserted in this Action, including the defenses asserted by Defendants. Most importantly, Lead Counsel took into account the fact, noted above, that on January 21, 2014, the Court dismissed the claims for all Affymax shareholders who purchased their shares prior to February 12, 2013. Accordingly, only Class Members who purchased shares on or after February 12, 2013 through February 22, 2013 have viable claims before the Court. With no new allegations or facts to support the earlier period that was dismissed by the Court, Lead Counsel endeavored to maximize the return to the Class Members whose claims survived the Court order of dismissal while recognizing that Class Members with dismissed claims had a right of appeal.’