LOS ANGELES--(BUSINESS WIRE)--The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Infinity Pharmaceuticals, Inc. (INFI) (“Infinity” or the “Company”) (Nasdaq: INFI) securities between January 5, 2022 and July 24, 2023, inclusive (the “Class Period”). Infinity investors have until October 16, 2023 to file a lead plaintiff motion.
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For over a year, Defendants pushed the false narrative that Infinity’s flagship product, eganelisib, was proceeding apace in its clinical studies as a treatment for breast cancer. Specifically, Infinity touted two clinical studies: (1) MARIO-4, a randomized, double-blind Phase 3 study; and (2) MARIO-P, a platform study to evaluate additional combinations and indications where eganelisib might increase the effectiveness of available therapies.
On February 23, 2023, before the stock market opened, Infinity announced via a webcast (the “Webcast”) that it had entered into a merger agreement with MEI Pharma, Inc. The proposed transaction was all stock, pursuant to which Infinity shareholders would receive shares of MEI common stock. Infinity would become a wholly-owned subsidiary of MEI, with outstanding equity post-closing being held 58% by MEI shareholders and 42% by Infinity shareholders.
During the Webcast, Defendant Perkins stated Infinity would “prioritize head and neck cancer.” No mention at all was made of breast cancer treatments. It was as if MARIO-4 and MARIO-P never existed, and breast cancer was never a priority for eganelisib treatment.
This pivot did not go unnoticed by the stock market, and the value of Infinity stock plummeted. Infinity stock had closed at $0.55 on February 22, 2023. The following day, on extraordinary volume of over 3 million shares, Infinity stock lost half its volume, closing at $0.28 per share. Typically, volume of shares traded on a daily basis was fewer than 500,000 shares. Infinity stock averaged over 2 million shares traded per day over the next week as the market absorbed the shocking news.
On February 21, 2023, Infinity’s market cap was around $50 million, with $40 million in cash and a pipeline of products. On February 24, 2023, Infinity had a $20 million market cap, trading at half its cash value and essentially allocating $0 value to its pipeline. The combined market caps of both Infinity and MEI was $50 million. David Usso, of MEI, stated on the Webcast that expected cash after the merger was expected to be $100 million. So the price at which the two companies were trading was equivalent to only half of cash on hand.
On July 24, 2023, Infinity announced that the merger had been terminated, because shareholders of the merging company voted against it. On this news, Infinity’s stock price fell $0.09, or 40%, to close at $.13 per share on July 24, 2023, thereby injuring investors further.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Infinity overstated its prospects for a breast cancer treatment; (2) Infinity was overly optimistic about its breast cancer studies; (3) all the foregoing, once revealed, was likely to negatively impact Infinity’s business, financial results, and reputation; and (4) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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If you purchased Infinity securities during the Class Period, you may move the Court no later than October 16, 2023 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Infinity securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 2121 Avenue of the Stars, Suite 800, Los Angeles, California 90067 at 310-914-5007, by email to firstname.lastname@example.org, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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