NEW YORK, June 24, 2016 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against TransEnterix Inc. (“TransEnterix” or the “Company”) (NYSE:TRXC) and certain of its officers. The class action, filed in United States District Court, Middle District of North Carolina, and docketed under 16-cv-599, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired TransEnterix securities between February 10, 2016 and May 10, 2016, inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased TransEnterix securities during the Class Period, you have until August 1, 2016 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
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TransEnterix is a medical device company that seeks to use flexible instruments and robotics to improve the outcomes of minimally invasive surgery. The Company developed and commercialized the SurgiBot System (“SurgiBot”), a single-port, robotically enhanced laparoscopic surgical platform. The surgical approach and motions used with the SurgiBot robotic device are intended to mimic established laparoscopic surgical techniques.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: there were 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.
April 20, 2016, 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.”
On this news, the price of TransEnterix stock declined substantially. After closing at $4.74 on April 20, 2016, the stock opened at $1.57 per share on April 21, 2016, falling to a low of $1.28 and ultimately closing at $2.27, a decline of more than 50%.
On May 10, 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, Defendants revealed the Company would now “focus [its] resources on the commercialization of and regulatory clearance for the ALF-X System.” TransEnterix further stated that it would “delay any potential re-filing for the SurgiBot System” until after the Company could achieve 510(k) clearance for its other robotic surgical device, the ALF-X System (the “ALF-X”), despite the fact that it did not expect to submit a 510(k) for the ALF-X until the fourth quarter of 2016. Defendants also revealed that TransEnterix had “taken actions to reduce headcount and investment related to the SurgiBot.”
During a conference call after the market closed on May 10, 2016, Defendant Joseph P. Slattery stated that TransEnterix was “reduc[ing] head count investment in SurgiBot production and development” which “resulted in an annualized reduction in salaries of approximately $4 million.” The next day, the Triangle Business Journal reported that TransEnterix “cut ties with an estimated 50 employees in the United States – about 40 percent of its workforce in this country.”
In response to the negative news revealed after the market closed on May 10, 2016, the price of TransEnterix stock dropped again, falling more than 10% to close at $1.84 on May 11, 2016.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com