Robbins LLP: Keryx Biopharmaceuticals, Inc. (KERX) Misled Shareholders According to a Recently Filed Lawsuit
Robbins LLP announces that a shareholder derivative lawsuit was filed on behalf of Keryx Biopharmaceuticals, Inc. (NASDAQCM: KERX) in the Commonwealth of Massachusetts Superior Court, Suffolk County. The complaint is brought against certain officers and directors of the company for alleged breach of fiduciary duties, unjust enrichment, waste of corporate assets, abuse of control, and gross mismanagement. Keryx is a biopharmaceutical company that focuses on providing therapies for patients with renal disease in the United States. Its product, Auryxia, is an oral, absorbable, iron-based compound designed to control serum phosphorous levels in patients with chronic kidney disease on dialysis.
Keryx Accused of Concealing Production Difficulties Surrounding Its Drug Product
According to the complaint, Keryx officials schemed to facilitate their violations of law and to conceal adverse information concerning the company’s operations, financial condition, competitors, future business prospects, and internal controls. The complaint alleges that Keryx officials misled shareholders into believing that the company would contract with multiple manufacturers to produce Auryxia. For example, Keryx repeatedly referenced “third party manufacturers” and “contract manufacturers” in its public filings. In so doing, Keryx officials allegedly concealed the true risks associated with the manufacturing and supply of Auryxia because Keryx contracted with only a single manufacturer to produce its only marketed drug.
The complaint further alleges that Keryx officials failed to disclose that: (1) the company contracted with a single contract manufacturer, not multiple third party manufacturers, to convert the active pharmaceutical ingredient (“API”) of Auryxia to the finished drug product; (2) the company was experiencing production-related difficulties in converting API to the finished drug product; (3) these difficulties resulted in decreased production yields of finished drug product; (4) the company would necessarily exhaust its reserve of finished drug product; and (5) the company lacked adequate inventory controls. On August 1, 2016, Keryx revealed that the company would halt the distribution of Auryxia until October 2016 due to production difficulties on the part of its only contract manufacturer, and that Keryx was withdrawing its financial guidance for 2016. On this news, Keryx stock fell $2.64 per share, or 35.8%, to close at $4.72 per share on August 1, 2016.
Keryx Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.