Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against BioLineRx, Enovix, Southwest Airlines, and Y-mAbs and Encourages Investors to Contact the Firm
By: Bragar Eagel & Squire via GlobeNewswire
January 23, 2023 at 21:00 PM EST
NEW YORK, Jan. 23, 2023 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of BioLineRx Ltd. (NASDAQ: BLRX), Enovix Corporation (NASDAQ: ENVX), Southwest Airlines Co. (NYSE: LUV), and Y-mAbs Therapeutics, Inc. (NASDAQ: YMAB). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
BioLineRx Ltd. (NASDAQ: BLRX)
Class Period: February 23, 2021 - September 19, 2022
Lead Plaintiff Deadline: March 6, 2023
According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose, among other things, that: (1) the Company was not well financed to develop Motixafortide while at the same time advancing other pipeline programs; (2) BioLine would require a loan from Kreos Capital VII Aggregator SCSP in an aggregate principal amount of up to $40 million and then also would require a $15M securities offering to facilitate the commercial launch of Motixafortide; and (3) as a result of the foregoing, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
When the truth emerged, the lawsuit claims that investors suffered damages.
For more information on the BioLineRx class action go to: https://bespc.com/cases/BLRX
Enovix Corporation (NASDAQ: ENVX)
Class Period: February 22, 2021, - January 3, 2023
Lead Plaintiff Deadline: March 7, 2023
Enovix purports to design, develop, and manufacture silicon-anode lithium-ion batteries using proprietary 3D cell architecture, which the Company claims allow its batteries to achieve higher energy density. Enovix hopes to customize and deliver its batteries to other companies which can then incorporate them into their consumer electronics, such as wearable smartwatches, VR headsets, laptop computers, mobile phones, and electric vehicles. Since launching in 2007, the Company has focused on developing and commercializing its batteries. It did not generate any revenue from its products until the second quarter of 2022.
On February 22, 2021, Enovix announced plans to become a publicly traded company. At that time, Enovix set an “ambitious goal” to both develop its own U.S.-based manufacturing line and to begin delivering products to customers (thereby recognizing its first product revenue) by the second quarter of 2022.
Five months after this announcement, on July 15, 2021, Enovix became a publicly traded company. Rather than go public through a traditional initial public offering (“IPO”), Enovix used a novel method that sidesteps the normal regulatory framework and shareholder protections of the traditional IPO. Enovix merged with a special purpose acquisition company (“SPAC”), a public shell corporation with no business of its own other than to acquire a private company. On July 14, 2021, Enovix was officially acquired by RSVAC, which then changed its name to Enovix Corporation. As a result of this “de-SPAC” transaction, RSVAC’s publicly-traded shares became shares of Enovix when trading opened on the Nasdaq Global Select Market (“Nasdaq”) the following day.
RSVAC’s Chairman and Chief Executive Officer, Defendant Rodgers, stayed on as a member of Enovix’s board of directors following the de-SPAC transaction.
Enovix raised $405 million from investors through its de-SPAC merger with RSVAC. In a July 14, 2021 press release, the Company announced that the gross cash proceeds raised through the transaction would “allow Enovix to build out its first two production facilities to support demand from blue chip customers in the global mobile computing market while continuing to develop cells for Electric Vehicles (EVs).”
Throughout the Class Period, starting with statements made at the time of the deSPAC, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about Enovix’s revenues and ability to manufacture its proprietary battery technology.
For Enovix, developing advanced battery technology was not enough. The Company would also have to create a process to manufacture its batteries at a large enough scale to satisfy the needs of its customers. Otherwise, it could not monetize its proprietary technology. To borrow the Company’s own words, it hoped to “evolve from a company focused predominantly on R&D to a company capable of volume production and commercialization.”
Enovix’s CEO, Defendant Harrold Rust, stressed the importance of manufacturing in statements made when the Company went public. In a July 14, 2021 press release, Rust stated that Enovix was “focused on producing the first advanced silicon-anode lithium-ion battery for mass-market applications from our U.S. manufacturing facility.” Defendant Rodgers added: “We believe that Enovix will be the first to deliver at scale due to its proprietary 3D cell architecture, world-class team and automated manufacturing. With five design wins with major technology leaders, Enovix is years ahead of other battery companies. Even better, it has a plan to maintain that lead.”
Just months before the merger, Enovix had received key equipment to establish its first manufacturing line at its “Fab-1” facility in Fremont, California. Although Enovix had previously produced and delivered sample batteries using its pilot production line, the pilot line produced only 20 batteries per day. Building a full-scale production facility was therefore a key step to producing batteries at a commercial level. Because of the global COVID-19 pandemic, the Company resorted to chartering a Ukrainian Antonov An-124, one of the largest cargo planes on the planet, to ensure that its equipment reached Fab-1 on schedule. Enovix thereby narrowly avoided a three-month delay in the buildout of its Fab-1 facility, a delay that would have prevented the Company from having a single manufacturing line in place by the time it went public in July
In November 2021, Enovix announced to its investors that it had begun developing a second automated production line at its Fab-1 facility. This was a significant development for Enovix. The second line, it told investors, would be a “workhorse” focusing on batteries for mobile electronics, such as laptops and smartphones, thereby supporting Enovix’s “ramp” to achieve meaningful scale and revenue in the consumer electronics market starting in 2023.
Enovix assured its investors in a March 2022 letter that moving from the R&D to the production phase would “distinguish us from other advanced battery companies that have claimed technology breakthroughs but remain years away from commercialization.” Revenue was just on the horizon, according to Defendants, and thanks to its use of sample batteries to drum up customer interest, the Company already had a $1.5 billion “revenue funnel” that it could tap into as soon as it could produce at scale.
To that end, Enovix also began to develop plans for a second production facility, Fab-2. Defendants told investors that Fab-2 would take lessons from Fab-1 and use different equipment, purportedly to occupy a smaller footprint and save the Company from having to rent a larger, more expensive space, while also delivering products more efficiently. However, Fab-2’s buildout was still years away. Near-term revenue – expected to be $6-12 million in 2022 and to “ramp” up in 2023 – would be driven by Fab-1.
On August 10, 2022, Enovix announced that it had met its February 2021 goal of recognizing its first product revenue by Q2 2022. The Company had brought in $5.1 million in revenue in the quarter. As the Company acknowledged, however, barely any of that revenue came from delivering products to customers. $5 million of the $5.1 million in revenue was attributable to completing the initial phases of a product development program with a single customer and qualified as “service revenue.”
At the same time Enovix announced that it had achieved revenue for the first time, Defendants also acknowledged that they would need to “increase our manufacturing yield metrics.” Accordingly, to “prioritize Fab-1 improvements in the third quarter” of 2022, Defendants announced that they would be “taking the line down for portions of the quarter to improve individual process modules and install planned battery conveyance.” Defendants stated that their “goal” was to “do the needed work in Q3 to position us for the start of our production ramp to close the year.” Defendant Rust told investors that Fab-1 would be “the workhorse of our output next year” and to expect the revenue “ramp” to begin in Q4 2022, after the “improvements” had been made to Fab-1.
In reality, and as Defendant Rodgers would later concede, Fab-1 did not need to be “improved” as much as it needed to be fixed. Fab-1’s supposedly “automated” manufacturing lines were beset by problems that required significant manual intervention to produce batteries. In addition, machines that were meant to yield 550 batteries per hour could only complete around 100.
Defendants obscured these issues from Enovix’s shareholders. While boasting that Enovix had built a “functioning factory” that would produce “millions of units” for customers in 2023, Defendants explained away the necessary production line shut-downs as being merely a way to “install planned battery conveyance” and “improve individual process modules” to optimize the lines for the expected ramp-up in production. They did not inform investors that the lines were not running anywhere close to their intended levels and could not produce at scale absent dramatic changes.
On November 1, 2022, Enovix announced its financial results for the third quarter of 2022. Enovix revealed that in the quarter, it realized just $8,000 in revenue. Moreover, it revealed that it would be “dialing back” its work on improving the Gen1 lines in favor of shifting its focus to its future Gen2 lines because the supposed improvements were not having the desired results on output. Consequently, Enovix “anticipate[d] achieving lower overall output from Fab-1 in 2023.” In fact, Enovix revealed, it anticipated producing fewer than one million batteries in 2023.
On this news, Enovix fell from a close of $18.87 per share on October 31, 2022, to $10.53 per share by the close of trading on November 2, 2022, a 44% decline.
On November 7, 2023, Enovix announced that Defendant Rodgers would assume the role of Executive Chairman. In a statement released that day, Defendant Rodgers criticized his own company for a “lack of clear and transparent investor communications” and conceded: “We have poorly communicated on the status of Fab-1.”
Defendant Rust subsequently departed as Chief Executive Officer on December 29, 2022.
On January 3, 2023, Defendant Rodgers held a special presentation for investors via conference call. On the call, Rodgers revealed that the Company’s second production facility and Gen2 lines would be delayed by several additional months because of the equipment failures experienced in the Fab-1 lines.
On this news, Enovix’s share price dropped 41% from a close of $12.12 per share on January 3, 2022 to a close of $7.15 on January 4, 2022.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class Members have suffered significant losses and damages.
For more information on the Enovix class action go to: https://bespc.com/cases/ENVX
Southwest Airlines Co. (NYSE: LUV)
Class Period: June 13, 2020 - December 31, 2022
Lead Plaintiff Deadline: March 13, 2023
Winter storms disrupted holiday travel during the 2022 holiday season, leaving thousands of travelers stranded in airports around the United States. However, not all domestic airlines were affected equally. Southwest Airlines flight cancellations accounted for the vast majority of domestic flight cancellations, leaving travelers unable to visit loved ones over the holidays, and attracting the ire of the federal government.
As flights were getting cancelled around the country, it soon emerged that the root cause behind Southwest Airlines’ cancellations was outdated and ineffective technology, in particular, its crew scheduling system (called “Sky Solver”). Further compounding on this issue, Southwest Airlines used an aggressive flight schedule that left it prone to greater cancellations than its competitors in the event of unusual conditions, such as nationwide storms.
As various national news outlets focused on how Southwest Airlines’ utter failure to provide adequate services to its customers left thousands stranded at airports across the country, the truth about the Company’s business began to emerge.
On December 26, 2022, Business Insider published an article about Southwest Airlines entitled “U.S. Department of Transportation says it plans to look into Southwest Airlines following the airline’s unacceptable holiday flight cancellations.” The article highlighted that the Department of Transportation had announced that it would examine “whether cancellations were controllable,” and whether Southwest Airlines was complying with its stated customer service plan, after reports of a lack of prompt customer service in the wake of cancellations.
On the same day, CNN published an article entitled “Massive Southwest Airlines Disruption Leaves Customers Stranded and Call Centers Swamped.” CNN discussed how the winter conditions had affected Southwest Airlines to a much greater extent than its competitors, and then discussed how it had been provided a transcript of a message from Defendant Jordan to Southwest’s employees. In this message, Defendant Jordan stated that “[Southwest Airlines] has a lot of issues in the operation right now,” and that “[p]art of what we’re suffering is a lack of tools. We’ve talked an awful lot about modernizing the operation, and the need to do that.”
Then, on December 27, 2022, Reuters published an article entitled “Southwest cancels thousands more flights; U.S. Government Vows Scrutiny.” This article quoted Casey Murray, president of the Southwest Airlines Pilots Association (the "SWAPA"), who said “Southwest is using outdated technology and processes, really from the ‘90s, that can’t keep up with the network complexity today.”
The Reuters article also discussed Southwest Airlines’ flight schedule. Rather than flying out of hubs, Southwest Airlines relies on the aforementioned point-to-point service, which leaves Company staff vulnerable to being stranded during disruptions (such as inclement weather). Murray said that this complex and aggressive business model was possible. However, executing this strategy in adverse conditions would only be possible with software that was more effective than Sky Solver, Southwest Airlines’ proprietary software that is used to match flight staff personnel with different flights. Murray stated that “[w]e had aircraft that were available, but the process of matching up those crew members with the aircraft could not be handled by our technology.” Due to Sky Solver’s failure, the Company had to manually match crew members to specific flights, a process that Murray called “extraordinarily difficult.”
On the same day, CNN published an article entitled “Why Southwest is Melting Down,” which quoted Kathleen Bangs, a spokesperson for a flight tracking website called FlightAware, who stated that Southwest’s schedule was aggressive in that it focused on shorter flights with tight turnaround times. Bangs further stated, “[t]hose turnaround times bog things down.”
The December 27 CNN article quoted Lyn Montgomery, the president of the labor union which represents Southwest Airlines’ flight attendants, as saying “[t]he phone system the company uses is just not working. They’re just not manned with enough manpower in order to give the scheduling changes to flight attendants, and that’s created a ripple effect that is creating chaos throughout the nation.”
The December 27 CNN article revealed that it also obtained a transcript of a phone call between Southwest Airlines’ COO, Andrew Watterson, and various company employees, in which Watterson stated “[t]he process of matching up [crew members] with the aircraft could not be handled by our technology.”
On this news, Southwest Airlines stock fell from a closing price of $36.09 on December 23, 2022, to $33.94 on the next trading day, December 27, 2022, and then to $32.19 on December 28, 2022, a drop of over 12%.
More news emerged about Southwest Airlines over the following days. On December 30, 2021, My Tech Decisions published an article about Southwest Airlines entitled “Southwest Airlines’ Holiday Collapse Due in Part to Outdated IT Systems,” which discussed how the SWAPA had warned that the Company needed to improve its technological infrastructure. SWAPA stated, “A systemic failure of Southwest Airlines leaders to modernize, support, and staff its operation leaves every frontline employee, Pilots included, tired of apologizing to our passengers. [. . .]. For more than a decade, leadership shortcomings in adapting, innovating, and safeguarding our operations have led to repeated system disruptions, countless disappointed passengers, and millions in lost profits.” Further, “[we call for investing in infrastructure in the form of] crew scheduling software that takes into account our point-topoint network, [. . .] and communication tools that would have allowed for displaced crews to remain in in constant contact with our Company.”
On December 31, 2022, The New York Times published an article entitled “The Shameful Open Secret Behind Southwest’s Failure,” which discussed how it was an “open secret” within Southwest Airlines that it desperately needed to modernize its scheduling systems. In particular, the article discussed how software shortcomings had “contributed to previous, smaller-scale meltdowns,” and that Southwest Airlines worker unions had warned the Company about the software at various times before the Company’s meltdown over the 2022 holiday season.
On this news, Southwest Airlines stock fell from a closing price of $33.67 on December 30, 2022 to $32.6 on the next trading day, January 3, 2023, a drop of over 3%.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common shares, Plaintiff and other Class members have suffered significant losses and damages.
For more information on the Southwest Airlines class action go to: https://bespc.com/cases/LUV
Y-mAbs Therapeutics, Inc. (NASDAQ: YMAB)
Class Period: October 6, 2020 - October 28, 2022
Lead Plaintiff Deadline: March 20, 2023
According to Y-mAbs’s Form 10-K for fiscal 2021 (at 4), filed with the SEC on March 1, 2022, Y-mAbs is “a biopharmaceutical company focused on the development and commercialization of novel, antibody-based therapeutic products for the treatment of cancer.”
According to Y-mAbs’s public statements, “Omburtamab, our lead product candidate, is a murine monoclonal antibody that targets B7-H3, an immune checkpoint molecule that is widely expressed in tumor cells of several cancer types. 131 I-omburtamab, which is omburtamab radiolabeled with Iodine-131, is currently being studied in several clinical trials including pivotal stage development Study 101 and Study 03-133 for the treatment of pediatric patients who have CNS/LM from NB.” 2021 Form 10-K at 7.1
Study 03-133 included pediatric patients with neuroblastoma (NB) that relapsed in the central nervous system (CNS) or leptomeninges (CNS/LM).
Leptomeningeal metastases occurs when cancer cells have spread to thin layers of tissue that cover the brain and spinal cord.
According to Y-mAbs’s 2021 Form 10-K (at 27), there are approximately 700 children diagnosed with neuroblastoma (NB) in the United States each year. Of those, approximately 50-60% are high-risk, and of those at high-risk who relapse, Y-mAbs believes approximately 20% will suffer from leptomeningeal (central nervous system) metastases from neuroblastoma.
One treatment cycle of omburtamab takes 4 weeks and includes a treatment dose during week one followed by a 3-week observation period including a repeated MRI, CSF cytology, and safety monitoring.
Y-mAbs sought FDA approval of omburtamab through a Biologics License Application first in 2020 and again in 2022, based on a comparison between Study 03-133 performed at Memorial Sloan Kettering Cancer Center (“MSKCC”) and an external cohort comprising data from the Central German Childhood Cancer Registry, or CGCCR, database.
The efficacy population in Study 03-133 consisted of a subset of 94 patients ages 0.9 to 13 years. The first patient was enrolled in 2004, and the last patient enrolled in 2018.
Study 03-133 was a single-arm study without a control group.
The primary endpoint was overall survival (OS) at 3 years.
Tumor responses were not systematically analyzed in this study.
After CNS/LM relapse and prior to receiving omburtamab, all patients received at least one type of CNS-directed therapy (surgery, chemotherapy, and/or radiotherapy) and the majority of patients (76%) received all three treatment modalities.
The 3-year OS rate after CNS/LM relapse in the efficacy population of 94 patients was 54%.
The external control group (CGCCR), against which Study 03-133 was compared, included clinical data from patients with Stage 4 neuroblastoma included in the German national neuroblastoma clinical trials NB90, NB97 and NB2004 from 1990 to 2015.
Y-mAbs identified 79 patients in the source population who received at least one type of post-CNS relapse treatment (radiotherapy, chemotherapy, or surgery).
According to the 2021 Form 10-K “Data from 85 patients sourced from The Central German Childhood Cancer Registry, or CGCCR, showed a median OS of 4.7 months.” 2021 Form 10-K at 28.
Y-mAbs has represented in Form 10-K filings with the SEC that “An analysis of 107 patients with pediatric CNS/LM from NB who were treated with 131 I-Omburtamab in Study 03-133 demonstrated a median overall survival, or OS, of 50.8 months, as compared to historical median OS of approximately six to nine months.” 2021 Form 10-K at 7.
Study 101 is an ongoing international multi-center single-arm trial, to investigate the safety and efficacy of omburtamab in pediatric patients with neuroblastoma with relapse in the CNS including parenchymal or LM metastases.
The primary endpoint of the trial is 3-year OS rate, with a key secondary endpoint of overall tumor response rate (ORR).
Y-mAbs sought to utilize “interim efficacy, safety and pharmacokinetic data from Study 101 [to] support the BLA resubmission.” 2021 Form 10-K at 81.
As of October 2022, Study 101 was fully enrolled, but survival data remained immature.
21 CFR 314.126 contains the elements required to be satisfied in order to receive FDA approval for omburtamab. A drug or biologic product must demonstrate substantial evidence of effectiveness through adequate and well-controlled studies. To establish effectiveness, it is essential to distinguish the effect of the drug “from influences, such as spontaneous change in course of disease, placebo effect, or biased observation” (21 CFR 314.126(a)).
The FDA declined marketing approval of omburtamab in a Refusal to File (RTF) letter dated October 2, 2020, informing Y-mAbs that additional data, including evidence of durable response were necessary to provide the level of evidence needed to support an approval.
Y-mAbs disclosed the existence of the RTF letter in a press release dated October 5, 2020 and in an investor conference call the morning of October 6, 2020, but misrepresented the FDA’s willingness to approve omburtamab for marketing based on the existing clinical trials.
In fact, throughout the Class Period, beginning on October 6, 2020, Y-mAbs misrepresented to investors that, pursuant to a series of meetings and other communications between Y-mAbs and the FDA, that progress was being made that would align with the FDA’s requirement to demonstrate substantial evidence of effectiveness, sufficient for approval of omburtamab, through adequate and well-controlled studies.
Specifically, the FDA had repeatedly advised the Defendants that the FDA was unlikely to grant approval for the marketing of omburtamab based on a comparison between Study 03-133 and CGCCR because of substantial differences in the patient populations, and the absence of tumor response data, and that Study 101 was neither sufficiently advanced nor indicative of efficacy to justify approval.
The statements alleged to be false and misleading were not forward-looking statements because they misrepresented existing facts based on communications with the FDA with respect to the approval.
The true facts were first disclosed to investors shortly after the opening of trading on October 26, 2022 when the FDA published its Briefing Document for an October 28, 2022 Advisory Committee (“AdCom”) Meeting, and again, on October 28, 2022 when the AdCom vote 16-0 against recommending approval of omburtamab.
The disclosure of the true facts caused Y-mAbs common shares to plummet $11.56 a share from the closing price on October 25, 2022 of $15.17 a share to close on October 31, 2022 at $3.61 a share.
For more information on the Y-mAbs class action go to: https://bespc.com/cases/YMAB
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Bragar Eagel & Squire, P.C.
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