On June 14, 2016, Pomerantz LLP was appointed Co Lead Counsel in a class action lawsuit against NantKwest, Inc. ("NantKwest" or the "Company") and certain of its officers. The class action, filed in United States District Court, Central District of California, and docketed under 16-cv-01947, is on behalf of a class consisting of all persons or entities who purchased NantKwest securities between September 10, 2015 and March 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.
NantKwest, a biotechnology company, develops immunotherapeutic agents for various clinical conditions. The Company also holds right to commercialize a range of genetically modified derivatives that kills cancer and virally infected cells.
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: (i) NantKwest's financial statements contained errors related to stock-based awards to the Company's Chief Executive Officer and Executive Chairman defendant Patrick Soon-Shiong ("Soon-Shiong"); (ii) NantKwest's financial statements contained errors related to build-to-suit lease accounting related to one of the Company's research and development and good manufacturing practices ("GMP") facilities; (iii) the Company lacked effective internal financial controls; and (iv) as a result of the foregoing, NantKwest's public statements were materially false and misleading at all relevant times.
On March 11, 2016, NantKwest announced that the Company's interim financial statements for the quarters ended June 30, 2015 and September 30, 2015 should no longer be relied upon due, in part, to the combined effect of financial statement errors primarily attributable to certain stock-based awards to defendant Soon-Shiong and build-to-suit lease accounting related to one of its research and development and GMP facilities.
On this news, NantKwest stock fell $0.28, or 3.31%, to close at $8.17 on March 11, 2016.