Claims

An in-principle settlement of AU$40 million has been reached in the proceeding between the Respondent (Sirtex Medical Limited(Sirtex)) and the Applicants (Mr Pawel Kuterba and Mr Todd Hayward).

The in-principle settlement requires Court approval to be effective and for monies to be distributed to eligible group members. The Court has been asked to approve the settlement at a hearing to be held on 23 August 2019.

Registry

Victoria Registry, Federal Court of Australia (VID1375/2017).

Date of Filing

15 December 2017.

File Title

PAWEL KUTERBA & ANOR v SIRTEX MEDICAL LIMITED

Presiding Judge

Justice Murphy.

Solicitors for Applicant

Maurice Blackburn.

Solicitors for Respondents

Watson Mangioni Lawyers.

Funder

IMF Bentham.

Claim Overview

The class action alleged contraventions of the ASIC Act, Corporations Act and the Australian Consumer Law in seeking to establish that Sirtex engaged in misleading or deceptive conduct and/or breached its continuous disclosure obligations.

The primary disclosure issue related to Sirtex’s dose sales growth guidance for the SIR Spheres and it’s disclosure to the market that the 1H17 dose sales were substantially less than previously forecast. After Sirtex was prompted by the ASX, it made an announcement on 9 December 2016 that the dose sales growth rate would be 4% to 6% rather than the 15.7% previously forecast. Upon the announcement, the Sirtex share price fell by 37%.

A further disclosure issue was the nature of share trades undertaken by then-CEO, Gilman Wong. Mr Wong sold 74,968 Sirtex shares on 26 October 2016 in order to, in the company’s words, ‘cover the tax incurred in relation to the recently vested tranche of rights.’ When Sirtex subsequently announced on 16 December 2016 that they had formally engaged its legal advisors, Watson Mangioni, to investigate Mr Wong’s trading activities, the Sirtex share price suffered a two day price drop of 9%. Mr Wong’s employment with Sirtex was subsequently terminated on 13 January 2017.

Class Members

Shareholders who acquired ordinary shares in Sirtex during the period from 24 August 2016 to 16 December 2016 (inclusive).

Competing Class Action

This proceeding (Hawyard proceeding) was consolidated with proceeding number VID1375/2017 (Pawel Kuterba v Sirtex Medical Limited) (Kuterba proceeding) by order on 30 April 2018.

Maurice Blackburn are the solicitors on the record for the Joint Applicants in the consolidated proceeding and shall have responsibility for the conduct of the consolidated proceeding.

Registry

Victoria Registry, Federal Court of Australia (VID91/2017).

Date of Filing

9 February 2017.

Presiding Judge

Justice Murphy.

Solicitors for Applicant

Portfolio Law Pty Ltd.

Solicitors for Respondents

Watson Mangioni Lawyers.

Funder

BSL Litigation Partners Limited.

Claim Overview

On 24 August 2016, Sirtex disclosed to the market that it forecast “double digit dose sales growth [of SIR-Spheres] to continue in the 2017 financial year (“FY2017”).

The applicant alleged that Sirtex had no reasonable grounds for making this representation and accordingly the representation is taken to be misleading or deceptive.

On 9 December 2016, Sirtex made a corrective disclosure of their full year growth in dose sales to be in the range of 5%-11%.

The applicant alleged that Sirtex became aware of material information about the FY2017 forecasts no later than 26 October 2016 and failed to disclose this information to the market.

The applicant alleged that in the period from 24 August 2016 until the commencement of trading on 9 December 2016 that the price for SRX ED securities was inflated because the market did not know:

  • that Sirtex had represented that Sirtex would have double digit dose sales growth in FY2017 when Sirtex had no reasonable grounds for making that representation; and
  • the material information about the FY2017 forecasts to the ASX which Sirtex first disclosed to the market on 9 December 2016.
Class Members

The claim was brought by Mr Hayward (“the applicant”) on his own behalf and on behalf of all persons who acquired ordinary shares in Sirtex on or after 24 August 2016 and who held any of those shares at the commencement of trading on 9 December 2016.