According to the Complaint, H.C. Wainwright and Co., LLC (Wainwright) is an investment bank that provides financial solutions to public and private companies across multiple sectors and regions. Wainwright offers a variety of financial services including investment research, underwriting, and capital raising services.
Among the companies that Wainwright provides investment research on is MannKind. MannKind is a publicly traded biopharmaceutical company headquartered in Westlake Village, California. MannKind researches, develops and commercializes inhaled therapeutic products for patients with diseases such as diabetes and pulmonary arterial hypertension. Afrezza is MannKind’s first and only FDA-approved product. Afrezza is a rapid-acting, inhaled insulin used to control high blood sugar in adults with type 1 and type 2 diabetes. MannKind is actively traded on the Nasdaq Stock Market under the ticker symbol “MNKD.” According to MannKind’s most recently filed quarterly report, filed August 7, 2017, MannKind had 104.68 million shares of common stock outstanding as of August 1, 2017.
On October 10, 2017 at 4:03 AM Pacific Time, before the markets opened, Wainwright initiated coverage of the MannKind stock with a “Buy” rating and a $7 per share price target, which represented an increase of more than 30% from the stock’s trading price at the time. At 6:17 AM Pacific Time, Wainwright published a report repeating the $7 per share price target and stating that Wainwright expected MannKind to recapitalize soon.
The Complaint alleges that the foregoing statements were materially misleading for failure to disclose that just 15 hours following Wainwright’s report on MannKind, Mannkind would announce a registered direct offering at a price of $6.00 per share. At the time of Wainwright’s statements, Mannkind’s stock was trading at $5.33 per share.
At 9:02 PM Pacific Time on October 10, 2017, MannKind announced a registered direct offering of an aggregate of 10,166,600 shares of common stock at an offering price of $6.00 per share. According to the announcement, the offering was expected to close on or about October 13, 2017.
On this news, MannKind’s stock price fell to a close of $5.47 per share on October 11, 2011.
The Complaint alleges that as a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of MannKind’s securities, Plaintiff and other Class Members have suffered significant losses and damages.
On February 8, 2018, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on February 27. On March 26, Defendants filed a Motion to Dismiss the amended Complaint. On December 11, the Court issued an Order granting Defendants' Motion to Dismiss. Lead Plaintiff was given leave to amend the Complaint. On January 9, 2019, Lead Plaintiff filed a second amended Complaint. Defendants filed a Motion to Dismiss the second amended Complaint on February 6. On July 2, the Court issued an Order granting Defendants' Motion to Dismiss. Lead Plaintiff was given leave to amend the Complaint. Lead Plaintiff filed a Notice of Intent not to Amend the second amended Complaint on July 23. On August 9, the Court issued Final Judgment and Order of Dismissal, dismissing the case with prejudice. Lead Plaintiff filed a Notice appealing the Dismissal Order on September 6. On April 8, 2021, the Court of Appeals affirmed the District Court's Order of Dismissal.
