Cancer treatment company Sirtex has become the latest target of a class action lawsuit, the third company to be hit within a week.
The legal action follows a forecast of double-digit sales of its cancer treatment to investors last August, which has proven to be wildly optimistic. Following weak December-half sales, it has slashed the full-year forecast to just 5-11 per cent.
Ahead of the downgrade, the company's then chief executive, Gilman Wong, sold shares in the company, which led to his sacking last month after an investigation into the sales by external legal advisers.
With more than $100 million in cash sitting on its balance sheet, a class action legal suit was thought to be only a matter of time after the downgrade.
Last week, Bellamy's Australia was hit with a class action, as was Spotless earlier this week.
Sirtex said it has received "a letter from a law firm foreshadowing the commencement of a representative proceeding against the company based on alleged breaches of its continuous disclosure obligations, and alleged misleading and deceptive conduct, arising out of a statement made by the company on August 24, 2016 that the company would achieve 'double-digit dose sales growth'Â in FY17.
"The board is considering the foreshadowed claim, and taking legal advice, but considers that the claim is material to the company."
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