NEW YORK, Feb. 19, 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 Southwest Airlines Co. (NYSE: LUV), Y-mAbs Therapeutics, Inc. (NASDAQ: YMAB), Bioventus Inc. (NASDAQ: BVS), and ESS Tech, Inc. (NYSE: GWH, GWH.WT). 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.
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getting cancelled around the country, it soon emerged that the root cause behind Southwest Airlines’ cancellations was outdated and ineffective technology, in particular, its crew scheduling system (called “Sky Solver”).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
Bioventus Inc. (NASDAQ: BVS)
Class Period: Pursuant to the February 11, 2021 IPO
Lead Plaintiff Deadline: March 13, 2023
Bioventus is a medical device company that focuses on developing and commercializing clinical treatments to engage and enhance the body's natural healing process.
On January 20, 2021, Bioventus filed a registration statement on Form S-1 with the SEC in connection with the IPO, which, after several amendments, was declared effective by the SEC on February 10, 2021 (the "Registration Statement").
On or about February 11, 2021, pursuant to the Registration Statement, Bioventus conducted the IPO, issuing 8 million shares of its Class A common stock to the public at the Offering price of $13.00 per share.
On February 12, 2021, Bioventus filed a prospectus on Form 424B4 with the SEC in connection with the IPO, which incorporated and formed part of the Registration Statement (the "Prospectus" and, together with the Registration Statement, the "Offering Documents").
The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Additionally, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and compliance policies. Specifically, the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose that: (i) Bioventus suffered from significant liquidity issues; (ii) the Company's rebate practices were unsustainable; (iii) accordingly, Defendants overstated the Company's business and financial prospects; (iv) Bioventus maintained deficient disclosure controls and procedures and internal control over financial reporting with respect to the timely recognition of quarterly rebates; (v) all the foregoing increased the risk that the Company would be forced to recognize a significant non-cash impairment charge, could not timely file one or more of its financial reports, would have to amend one or more of its financial statements, and could not meet its financial obligations as they came due; and (vi) as a result, the Offering Documents and Defendants' public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein.
On November 16, 2022, Bioventus issued a press release announcing that it could not timely file its quarterly report for third quarter of 2022 because "of the recent decline in the Company's market capitalization subsequent to its previously announced financial results for the · third quarter of 2022," which resulted in the Company needing "additional time ... to assess whether a non-cash impairment charge is required for the third quarter of 2022." Bioventus also revealed that it "is seeking resolution related to the validity of a revised invoice" for certain "rebate claims" and that "[t]he recognition of additional rebates may impact Bioventus' recently announced revenue guidance." In addition, Bioventus disclosed that "its internal controls related to the timely recognition of quarterly rebates were inadequate specifically for the period ended October 1, 2022" and that the Company "is also evaluating whether [it] will be able to meet all of its financial obligations as they come due within one year after the date its financial statements for the period ended October 1, 2022, are issued."
On this news, Bioventus's stock price fell $1.00 per share, or 33.67%, to close at $1 .97 per share on November 17, 2022.
Then, on November 21, 2022, Bioventus issued a press release announcing revised third quarter 2022 results to account for "additional rebate claims related to certain of the Company's products and a non-cash impairment charge" that amounted to $189.2 million "due to the recent decline in our market capitalization subsequent to our previously announced financial results for the three and nine months ended October 1, 2022." That same day, Bioventus belatedly filed its quarterly report on Form 10-Q with the SEC for the third quarter of 2022, advising of various changes to Bioventus's historical practices that were necessary to account for rebates, stating that these changes materially impacted the Company's evaluation of its ability to meet debt covenants, resulting in liquidity and going concern disclosures.
On this news, Bioventus's stock price fell $0.07 per share, or 3.72%, to close at $1.81 per share on November 22, 2022, representing a total decline of 86.08% from the IPO price.
As of the time this Complaint was filed, Bioventus's Class A common stock continues to trade below the $13.00 per share Offering price, damaging investors.
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 Bioventus class action go to: https://bespc.com/cases/BVS
ESS Tech, Inc. (NYSE: GWH, GWH.WT)
Class Period: August 11, 2022 - December 7, 2022
Lead Plaintiff Deadline: March 13, 2023
According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) the purported agreement with Energy Storage Industries Asia Pacific (“ESI”) was in fact an undisclosed related party transaction because ESI was a de-facto subsidiary of ESS masquerading as third-party client; (2) ESS misled investors with their partnership announcement to signal business success to investors; and (3) as a result, 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 true details entered the market, the lawsuit claims that investors suffered damages.
For more information on the ESS class action go to: https://bespc.com/cases/GWH
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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.
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