According to the law firm press release, Emergent is a specialty biopharmaceutical company. Emergent's anthrax vaccine, BioThrax (Anthrax Vaccine Adsorbed) ("BioThrax"), is the only one licensed by the U.S. Food and Drug Administration ("FDA"). In September 2011, Emergent entered into a five-year procurement contract with the U.S. government for 44.75 million doses of BioThrax. By the start of the Class Period, Emergent was reporting it had sold all of its BioThrax on hand and was working on a massive expansion of its BioThrax production facilities.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial prospects. Specifically, with no reasonable basis to believe that the Company's renewal of its contract with the U.S. government would call for the same level of, much less increased, purchases of BioThrax, Emergent claimed it remained on track to receive the lucrative renewal of its five-year exclusive anthrax vaccine procurement contract. Emergent also repeatedly emphasized an ongoing strong demand for BioThrax in light of the U.S. government's funding of Emergent's massive expansion of its BioThrax production facility, claiming with no reasonable basis that the expansion would enable the Company to manufacture some 20 to 25 million additional doses of BioThrax annually, which the U.S. government would purchase over the following five-year period in order to build the U.S. Strategic National Stockpile ("SNS") of anthrax vaccine to 75 million doses. As a result of defendants' materially false and misleading statements, Emergent common stock traded at artificially inflated prices, reaching a Class Period high of $43.95 per share, and enabling certain of the defendants to sell their personally held shares of Emergent common stock for proceeds of over $14.5 million.
Then on June 22, 2016, before the open of trading, Emergent announced that the U.S. government had issued two official solicitation notices indicating that it would only be purchasing 29.4 million doses of the BioThrax vaccine for its SNS over the following five years – approximately one-third less than the 44.75 million doses in the original contract and far less than the 75 million doses the Company had led the investment community to believe the U.S. government sought to purchase. Emergent also disclosed that instead of more first-generation BioThrax anthrax vaccine, the U.S. government was seeking to procure a newer, faster-working next-generation anthrax vaccine, once one was approved, and that it was putting its supply bid for the rest of its anthrax vaccine procurement out to other companies, such that Emergent stood to lose its lucrative exclusivity. In response to this news, the price of Emergent stock declined from a close of $39.32 per share on June 21, 2016 to a close of $31.33 per share on June 22, 2016.
The Court issued an Order appointing Lead Plaintiff and Counsel on October 26, 2016. Lead Plaintiff filed an amended Complaint on December 27, 2016. Defendants filed a Motion to Dismiss the amended Complaint on February 27, 2017. On July 7, 2017, the Court issued an Order denying Defendants' Motion to Dismiss.
On November 29, Lead Plaintiffs filed a Motion for Class Certification. On December 20, Lead Plaintiffs filed a Motion to amend the Motion for Class Certification. On June 8, 2018, the Court issued an Order granting Lead Plaintiffs' amended Motion for Class Certification.
On October 16, the parties entered into a Stipulation of Settlement. The Court granted preliminary approval of the Settlement on October 19.