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NeoRx hit with shareholder suit
A class action lawsuit was filed against NeoRx last month, charging the monoclonal antibody developerwith violations of state and federal securities laws. The lawsuitis related to a public stock offering completed by Seattle-basedNeoRx last December.
A class action lawsuit was filed against NeoRx last month, charging the monoclonal antibody developerwith violations of state and federal securities laws. The lawsuitis related to a public stock offering completed by Seattle-basedNeoRx last December.
NeoRx stockholder Murray B. Meld filed the suit May 23 in U.S.District Court in Seattle on behalf of himself and other NeoRxshareholders. The lawsuit charges that NeoRx was aware that amajor shareholder, David Blech, planned to divest his shares inthe company yet did not disclose that information in the offering'sprospectus. Blech sold his NeoRx shares in January and April.
NeoRx denied that it had advance knowledge of Blech's activitiesand will defend itself vigorously, according to chief financialofficer Robert M. Littauer. The lawsuit did not specify a damageclaim.
The impetus for the lawsuit could have come from a sharp declinein NeoRx's stock price after the public offering. NeoRx stockfell from $8.50 a share in January to $3.43 on June 8. The declineappears to be due to the overall softness in biotechnology issues,as well as a decline in stocks held by Blech, who owns an investmentbanking company that came under pressure in April, according toLittauer. NeoRx issued no negative news during that period, hesaid.
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