Adamas Pharmaceuticals Inc. (ADMS) Accused of Inflating its SPO Price

According to the complaint against the company for alleged violations of the Securities and Exchange Act of 1933 pursuant to the company's January 2018 secondary public offering ("SPO"), before launching Gocovri, Adamas Pharmaceuticals Inc. (ADMS) knew it faced significant roadblocks that would dramatically reduce its ability to sell the drug, yet did not inform–and actively misled—the market about this problem. Adamas failed to disclose known risks and trends that impacted the company before, during, and after the SPO. Therefore, when Adamas held its SPO in January 2018, it was able to offer its stock at $41.50 per share for gross proceeds of $134 million. In October 2018, Merrill Lynch released a study that cast serious doubt on Gocovri's ability to achieve a sizeable market share, and highlighted a number of factors that made clear how Adamas omitted critical information. In March 2019, Adamas walked-back prior growth estimates and refused to make further predictions about Gocovri's ability to achieve a sizeable market share. On this news, Adamas's stock fell 33% to $8.16 per share, a decline of over 80% in the approximate year following the SPO.