In a significant development, the United States District Court for the Central District of California issued a ruling on the motion to dismiss in the securities class action lawsuit against NantHealth, Inc. and its executives. The court found in favor of the investors, allowing most of the claims to proceed.
The lawsuit, filed on June 26, 2017, alleged that NantHealth, a company specializing in healthcare data management and diagnostic services, and its executives made material misrepresentations and omissions in connection with its Initial Public Offering (IPO) and subsequent communications to investors.
John A. Kehoe, Partner with the Kehoe Law Firm, and court-appointed co-lead counsel for the investors, expressed satisfaction with the court’s decision: “We are very pleased with the court’s ruling. This decision allows us to move forward with the action on behalf of investors who suffered losses due to the alleged misconduct by NantHealth and its executives.”
The lawsuit centers around NantHealth’s relationship with the University of Utah, wherein the company was chosen to conduct research for the University’s genome project. The plaintiffs claimed that NantHealth and its executives made misleading statements and failed to disclose material information related to this partnership.
Key allegations include the assertion that NantHealth’s CEO, Patrick Soon-Shiong, through his non-profit entities, donated $12 million to the University with specific conditions, ultimately leading to NantHealth being the sole qualified third-party research organization. The lawsuit further alleges misrepresentations in NantHealth’s IPO offering materials and communications regarding orders for GPS Cancer tests.
The court’s ruling acknowledged the plaintiffs’ claims under Section 10(b) and Rule 10b-5 of the Exchange Act, allowing the case to proceed against NantHealth and Soon-Shiong. “The court’s findings validate the allegations of material misrepresentations and omissions made by NantHealth and its executives,” according to Mr. Kehoe, who added “we look forward to prosecuting the action and seeking justice for those who suffered financial losses due to the alleged securities law violations.”
For more information about Kehoe Law Firm and its involvement in this matter, please contact John A. Kehoe at [email protected] or call (215) 792-6676.