Embattled Ciphergen Hit with Two Class-Action Lawsuits Alleging Fraud
Ciphergen Biosystems was named in two class-action lawsuits this week alleging that the company and certain of its officers and directors misled shareholders.
The first suit comes one day after the law offices of Kaplan Fox & Kilsheimer sued the company in a class-action suit charging that Ciphergen and certain of its top brass violated federal securities laws by "issuing a series of materially false and misleading statements to the market" between Aug. 8 and Nov. 16.
The second suit, filed by the Law Offices of Charles Piven in US District Court in the northern district of California, makes essentially the same charges as the first. In the new case, the attorneys have not named a plaintiff and have called on Ciphergen shareholders that meet certain legal requirement to contact its office by Feb. 6, 2006.
Ciphergen disclosed on Nov. 16 that an internal audit committee had determined that the company's second-quarter results need to be restated and could not be trusted.
The restatement would reduce the quarter's reported revenue by 7 percent, or $503,000, and increase reported net loss by 3 percent, or $301,000, Ciphergen said at the time.
The suits claim that Ciphergen's original second-quarter financial results, which reported a 10-percent slide in revenue and a 30-percent increase in losses, artificially inflated share prices, and that when the company disclosed its audit committee's findings, the stock plummeted 21 percent, from $1.73 to $1.36 per share.
Investors who purchased Ciphergen stock between Aug. 8 and Nov. 16 are covered under class-action status.
Ciphergen did not immediately return a telephone call seeking comment, but in a statement today the firm said it has not responded to the suit.
Separately, Ciphergen this week said it received a delisting notification from Nasdaq exchange because its market capital has failed to remain above $50 million for 10 consecutive days. The company received the Nasdaq letter on Dec. 2. Ciphergen has until Jan. 3, 2006, to regain compliance. The company said it will appeal the decision on Dec. 8.
454, WashU Pen Sequencing, Gene-Expression Alliance
454 Life Sciences and the Genome Sequencing Center at the Washington University School of Medicine plan to sequence disease-causing pathogens and study expression profiles of genes in mammalian cells and tissues, the organizations said this week.
The first part of the plan calls for GSC and 454 scientists to sequence and analyze the genomes of disease-causing pathogens using 454's Genome Sequencer 20 System. During the second part of the plan, scientists from the two partners will sequence RNA to assess the expression profiles of genes in mammalian cells and tissues.
Christopher McLeod, 454's president and CEO, noted that the cooperation "could be expanded to incorporate additional research topics in the future."
Financial details were not disclosed.
CombiMatrix Molecular Diagnostics, UCLA Plan Melanoma Test in '06
CombiMatrix Molecular Diagnostics and researchers at the University of California, Los Angeles, plan to use CombiMatrix's microarray technology to create a diagnostic for malignant melanoma.
The UCLA group, led by Scott Binder at the Department of Pathology and Laboratory Medicine at the Geffen School of Medicine, will work with CMD using routinely prepared formalin-fixed paraffin-embedded material. Binder's team will also provide clinically validated patient samples for the validation phase of the project.
The test is aimed at helping pathologists discriminate between atypical pigmented moles and malignant melanoma, CMD and UCLA said.
Matt Watson, CEO of CMD, said that if his firm can "gain CLIA certification in early 2006, and [its] development efforts proceed as planned, [CMD hopes] to have this test available to physicians and patients by the middle of 2006."
Separately, CMD this week announced plans to offer a DNA-based microarray service to identify types of influenza. The company is a wholly owned subsidiary of CombiMatrix, which formed the company last May.
Investment Bank Cuts ABI Stock Rating, Though Says Firm Can Meet Revenue Targets
Investment bank Lehman Brothers last week cut Applied Biosystems' stock rating to "equal-weight" from "overweight."
Though it said it continues to believe the company can meet revenue and earnings targets, the recent increase in the share price no longer warrants an overweight rating, Lehman Brothers said.
The broker said the recent run-up in the share price may be related to the company's stock buyback program.
Agilent Increases NCI's Access to Its Microarray Technology
Agilent Technologies has expanded the National Cancer Institute's access to its microarray technology program, the company said last week.
Under the program, NCI extramural researchers can obtain Agilent's microarray technology — including reagents, catalogs and custom microarrays, instrumentation, and software — for comparative genomic hybridization, location analysis, and gene expression.
The NCI funds approximately 4,500 research grants each year.
Researchers realize gene-expression data alone is not enough in cancer research, and that complementary microarray applications are necessary, the company said.
Agilent will offer researchers promotional pricing, the company said.
Separately today, Agilent said it wrapped up the sale of its semiconductor products business to Kohlberg Kravis Roberts and Silver Lake Partners for $2.66 billion.
Originally scheduled to complete on Oct. 31, the divesture was delayed to December to "provide a seamless transition," the company said.
The divestiture includes 6,500 employees and operations in Asia, the United States and Europe.
Metabolon Becomes Member of NCI's Early Detection Research Network
The National Cancer Institute's Early Detection Research Network has selected Metabolon as a member, the company said last week.
As a member, Metabolon will share its technology and metabolomics expertise with Arul Chinnaiyan of the University of Michigan to discover disease biomarkers for prostate cancer, the company said. The collaboration is funded by an NCI grant as part of the Chair's Challenge program.
The network was established by NCI in early 2000 and aims to identify and validate cancer biomarkers for early cancer detection.