Case 1:21-cv-00918 Document 1 Filed 02/19/21 Page 1 of 21 PageID #: 1
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
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`THERESA PITMAN, Individually and On
`Behalf of All Others Similarly Situated,
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`Plaintiff,
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`Case No.
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`CLASS ACTION COMPLAINT
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`JURY TRIAL DEMANDED
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`
`IMMUNOVANT, INC. f/k/a HEALTH
`SCIENCES ACQUISITIONS
`CORPORATION, PETER SALZMANN,
`PAMELA YANCHIK CONNEALY, and
`RODERICK WONG,
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`v.
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`Defendants.
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`Plaintiff Theresa Pitman (“Plaintiff”), individually and on behalf of all others similarly
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`situated, by Plaintiff’s undersigned attorneys, for Plaintiff’s complaint against Defendants, alleges
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`the following based upon personal knowledge as to Plaintiff and Plaintiff’s own acts, and
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`information and belief as to all other matters, based upon, inter alia, the investigation conducted
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`by and through Plaintiff’s attorneys, which included, among other things, a review of the
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`Defendants’ public documents, conference calls and announcements made by Defendants, United
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`States (“U.S.”) Securities and Exchange Commission (“SEC”) filings, wire and press releases
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`published by and regarding Immunovant, Inc. f/k/a Health Sciences Acquisitions Corporation
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`(“HSAC”, “Immunovant”, or the “Company”), analysts’ reports and advisories about the
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`Company, and information readily obtainable on the Internet. Plaintiff believes that substantial
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`additional evidentiary support will exist for the allegations set forth herein after a reasonable
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`opportunity for discovery.
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`NATURE OF THE ACTION
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`1.
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`This is a federal securities class action on behalf of a class consisting of all persons
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`and entities other than Defendants that purchased or otherwise acquired Immunovant securities
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`between October 2, 2019 and February 1, 2021, both dates inclusive (the “Class Period”), seeking
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`to recover damages caused by Defendants’ violations of the federal securities laws and to pursue
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`remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange
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`Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
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`2.
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`Immunovant is a clinical-stage biopharmaceutical company that develops
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`monoclonal antibodies for the treatment of autoimmune diseases. The Company is developing
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`IMVT-1401, a novel fully human monoclonal antibody, which is in Phase IIa clinical trials for the
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`treatment of myasthenia gravis (“MG”) and thyroid eye disease (“TED”), also known as Graves’
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`ophthalmopathy. The Company has also completed initiation of Phase II clinical trials of IMVT-
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`1401 for the treatment of warm autoimmune hemolytic anemia (“WAIHA”).
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`3.
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`On September 29, 2019, HSAC, then a blank check company,1 also known as a
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`special purpose acquisition company (“SPAC”), entered into an agreement with Immunovant
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`Sciences Ltd. (“Legacy Immunovant”), a private biopharmaceutical company, and shareholders of
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`Legacy Immunovant, to effect a merger between the two entities (the “Merger”). As a result of
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`the Merger, HSAC acquired all of the issued and outstanding shares of Legacy Immunovant, and
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`Legacy Immunovant became a wholly owned subsidiary of HSAC. Upon the closing of the
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`Merger, HSAC changed its name to “Immunovant, Inc.”
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`1 A blank check company is a development stage company that has no specific business plan or
`purpose or has indicated its business plan is to engage in a merger or acquisition with an
`unidentified company or companies, other entity, or person.
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`2
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`4.
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`Throughout the Class Period, Defendants made materially false and misleading
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`statements regarding the Company’s business, operations, and compliance policies. Specifically,
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`Defendants made false and/or misleading statements and/or failed to disclose that: (i) HSAC had
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`performed inadequate due diligence into Legacy Immunovant prior to the Merger, and/or ignored
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`or failed to disclose safety issues associated with IMVT-1401; (ii) IMVT-1401 was less safe than
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`the Company had led investors to believe, particularly with respect to treating TED and WAIHA;
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`(iii) the foregoing foreseeably diminished IMVT-1401’s prospects for regulatory approval,
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`commercial viability, and profitability; and (iv) as a result, the Company’s public statements were
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`materially false and misleading at all relevant times.
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`5.
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`On February 2, 2021, Immunovant issued a press release “announc[ing] a voluntary
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`pause of dosing in its ongoing clinical trials for IMVT-1401.” Immunovant disclosed that it “has
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`become aware of a physiological signal consisting of elevated total cholesterol and LDL [low-
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`density lipoproteins] levels in IMVT-1401-treated patients” and “[o]ut of an abundance of caution,
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`the Company has decided to voluntarily pause dosing in ongoing clinical studies in both TED and
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`in [WAIHA], in order to inform patients, investigators, and regulators as well as to modify the
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`monitoring program.”
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`6.
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`On this news, Immunovant’s stock price fell $18.22 per share, or 42.08%, to close
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`at $25.08 per share on February 2, 2021.
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`7.
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`As a result of Defendants’ wrongful acts and omissions, and the precipitous decline
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`in the market value of the Company’s securities, Plaintiff and other Class members have suffered
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`significant losses and damages.
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`JURISDICTION AND VENUE
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`8.
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`The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of
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`the Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the
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`SEC (17 C.F.R. § 240.10b-5).
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`9.
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`This Court has jurisdiction over the subject matter of this action pursuant to 28
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`U.S.C. § 1331 and Section 27 of the Exchange Act.
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`10.
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`Venue is proper in this Judicial District pursuant to Section 27 of the Exchange Act
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`(15 U.S.C. § 78aa) and 28 U.S.C. § 1391(b), as the alleged misstatements entered and the
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`subsequent damages took place in this Judicial District. Pursuant to Immunovant’s most recent
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`annual report on Form 10-K, as of June 29, 2020, there were 81,811,727 shares of the Company’s
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`common stock outstanding. Immunovant’s common stock trades on the Nasdaq Stock Market
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`(“NASDAQ”). Accordingly, there are presumably hundreds, if not thousands, of investors in
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`Immunovant’s common stock located within the U.S., some of whom undoubtedly reside in this
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`Judicial District.
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`11.
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`In connection with the acts alleged in this complaint, Defendants, directly or
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`indirectly, used the means and instrumentalities of interstate commerce, including, but not limited
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`to, the mails, interstate telephone communications, and the facilities of the national securities
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`markets.
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`PARTIES
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`12.
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`Plaintiff, as set forth in the attached Certification, acquired Immunovant securities
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`at artificially inflated prices during the Class Period and was damaged upon the revelation of the
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`alleged corrective disclosures.
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`13.
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`Defendant Immunovant is a Delaware corporation with principal executive offices
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`located at 320 West 37th Street, New York, New York 10018. The Company’s common stock
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`trades in an efficient market on the NASDAQ under the ticker symbol “IMVT.” Prior to the
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`Merger, the Company (i.e., HSAC) was a Delaware corporation with principal executive offices
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`located at 412 West 15th Street, Floor 9, New York, New York 10011, and its securities traded on
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`the NASDAQ under the ticker symbols “HSACU,” “HSAC,” and “HSACW.”
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`14.
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`Defendant Peter Salzmann, M.D. (“Salzmann”) has served as the Company’s Chief
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`Executive Officer (“CEO”) at all relevant times following the Merger.
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`15.
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`Defendant Pamela Yanchik Connealy (“Connealy”) has served as the Company’s
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`Chief Financial Officer at all relevant times following the Merger.
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`16.
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`Defendant Roderick Wong, M.D. (“Wong”) served as the Company’s President and
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`CEO at all relevant times prior to the Merger.
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`17.
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`Defendants Salzmann, Connealy, and Wong are sometimes referred to herein as the
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`“Individual Defendants.”
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`18.
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`The Individual Defendants possessed the power and authority to control the
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`contents of Immunovant’s SEC filings, press releases, and other market communications. The
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`Individual Defendants were provided with copies of Immunovant’s SEC filings and press releases
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`alleged herein to be misleading prior to or shortly after their issuance and had the ability and
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`opportunity to prevent their issuance or to cause them to be corrected. Because of their positions
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`with Immunovant, and their access to material information available to them but not to the public,
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`the Individual Defendants knew that the adverse facts specified herein had not been disclosed to
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`and were being concealed from the public, and that the positive representations being made were
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`then materially false and misleading. The Individual Defendants are liable for the false statements
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`and omissions pleaded herein.
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`19.
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`Immunovant and the Individual Defendants are collectively referred to herein as
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`“Defendants.”
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`SUBSTANTIVE ALLEGATIONS
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`Background
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`20.
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`Immunovant is a clinical-stage biopharmaceutical company that develops
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`monoclonal antibodies for the treatment of autoimmune diseases. The Company is developing
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`IMVT-1401, a novel fully human monoclonal antibody, which is in Phase IIa clinical trials for the
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`treatment of MG and TED, also known as Graves’ ophthalmopathy. The Company has also
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`completed initiation of Phase II clinical trials of IMVT-1401 for the treatment of WAIHA.
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`21.
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`On September 29, 2019, HSAC, then a blank check company, or SPAC, entered
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`into an agreement with Legacy Immunovant, a private biopharmaceutical company, and
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`shareholders of Legacy Immunovant, to effect a merger between the two entities. As a result of
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`the Merger, HSAC acquired all of the issued and outstanding shares of Legacy Immunovant, and
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`Legacy Immunovant became a wholly owned subsidiary of HSAC. Upon the closing of the
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`Merger, HSAC changed its name to “Immunovant, Inc.”
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`Materially False and Misleading Statements Issued During the Class Period
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`22.
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`The Class Period begins on October 2, 2019, when HSAC and Legacy Immunovant
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`issued a press release announcing the Merger (the “October 2019 Press Release”). That press
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`release touted the prospects of IMVT-1401, stating, in relevant part, that IMVT-1401 “is the result
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`of a multi-year research program . . . to engineer a highly potent anti-FcRn antibody specifically
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`optimized for subcutaneous injection with a small gauge needle”; that “IMVT-1401 is currently
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`being tested in a Phase 2a trial for Graves’ ophthalmopathy (potentially a first-in-class anti-FcRn),
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`with top-line data expected by Q1 2020”; and that “[Legacy] Immunovant also plans to file an
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`IND [investigational new drug application] for . . . [WAIHA], later this year.”
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`23.
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`The October 2019 Press Release also quoted Defendant Wong, who touted the
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`Merger and IMVT-1401’s commercial prospects, stating, in relevant part, that HSAC is “thrilled
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`to have the opportunity to partner with the team at [Legacy] Immunovant” and “believe[s] IMVT-
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`1401 is a uniquely compelling asset within the FcRn drug class, which [HSAC] expect[s] will
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`become a cornerstone therapy for treating many auto-antibody driven diseases.”
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`24.
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`Additionally, the October 2019 Press Release quoted Defendant Salzmann, who
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`likewise highlighted the purported commercial prospects of both the Merger and IMVT-1401,
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`stating, in relevant part, that he was “proud of the many milestones delivered by the [Legacy]
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`Immunovant team this year, including . . . initiation of a broad Phase 2 program with both first-in-
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`class and best-in-class potential in multiple diseases with high unmet patient need”; that
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`Defendants “believe the potency of IMVT-1401 and the ability to administer IMVT-1401 as a
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`simple subcutaneous injection represent important potentially differentiating features of this
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`product candidate”; and that “[t]oday’s financing transaction will allow [Defendants] to continue
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`to pursue [their] vision of enabling normal lives for patients with autoimmune diseases.”
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`25.
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`On March 30, 2020, post-Merger, Immunovant issued a press release announcing
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`initial results from the treatment phase of its ongoing the ASCEND GO-1 trial—a Phase 2a study
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`of IMVT-1401 in patients with TED (the “March 2020 Press Release”). That press release made
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`positive statements regarding IMVT-1401’s safety observed in the ASCEND GO-1 trial, stating,
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`in relevant part, that “IMVT-1401 was safe and generally well-tolerated with no serious adverse
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`events (SAEs), no withdrawals due to adverse events (AEs), and no headaches”; that “[t]he safety
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`and tolerability profile observed was consistent with the prior Phase 1 trial of IMVT-1401 in 99
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`healthy volunteers”; and that “[a]ll AEs were mild or moderate.”
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`26.
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`The March 2020 Press Release also quoted Defendant Salzmann, who represented,
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`in relevant part, that the ASCEND GO-1 trial’s “results provide an early proof-of-concept of the
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`potential for IMVT-1401 to ultimately become a safe and effective treatment for patients suffering
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`from [TED].”
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`27.
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`Additionally, the March 2020 Press Release quoted the ASCEND GO-1 trial’s
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`principal investigator, who likewise touted IMVT-1401’s safety profile, stating, in relevant part,
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`that he was “encouraged by IMVT-1401’s early results showing promising efficacy and safety
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`with a subcutaneous route of administration,” and that “[e]ven in this small study population, the
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`response across multiple measures is notable.”
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`28.
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`On June 29, 2020, Immunovant issued a press release reporting the Company’s
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`financial and operating results for the quarter and year ended March 31, 2020. That press release
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`reiterated IMVT-1401’s safety results highlighted in the March 2020 Press Release, as well as
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`additional data, all of which purportedly supported the overall safety and tolerability of IMVT-
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`1401. Specifically, that press release stated, in relevant part, that the “positive clinical results from
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`ASCEND GO-1 . . . reaffirmed IMVT-1401’s prior safety and pharmacodynamic findings . . . for
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`patients with TED,” while noting “two recent successful studies for other drug candidates with the
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`same mechanism of action” that “[c]omplement[ed] these findings.”
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`29.
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`Also on June 29, 2020, Immunovant filed an annual report on Form 10-K with the
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`SEC, reporting the Company’s financial and operating results for the quarter and year ended March
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`31, 2020 (the “2020 10-K”). The 2020 10-K also reiterated IMVT-1401’s safety observed in the
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`ASCEND GO-1 trial, stating, in relevant part, that “[t]he safety and tolerability profile observed
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`was consistent with the prior Phase 1 trial of IMVT-1401 in 99 healthy volunteers.”
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`30.
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`Appended as exhibits to the 2020 10-K were signed certifications pursuant to the
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`Sarbanes-Oxley Act of 2002, wherein Defendants Salzmann and Connealy certified that the 2020
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`10-K “fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange
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`Act” and that “[t]he information contained in the [2020 10-K] fairly presents, in all material
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`respects, the financial condition and results of operations of the Company.”
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`31.
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`The statements referenced in ¶¶ 22-30 were materially false and misleading because
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`Defendants made false and/or misleading statements, as well as failed to disclose material adverse
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`facts about the Company’s business, operations, and compliance policies. Specifically,
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`Defendants made false and/or misleading statements and/or failed to disclose that: (i) HSAC had
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`performed inadequate due diligence into Legacy Immunovant prior to the Merger, and/or ignored
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`or failed to disclose safety issues with IMVT-1401; (ii) IMVT-1401 was less safe than the
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`Company had led investors to believe, particularly with respect to treating TED and WAIHA; (iii)
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`the foregoing foreseeably diminished IMVT-1401’s prospects for regulatory approval, commercial
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`viability, and profitability; and (iv) as a result, the Company’s public statements were materially
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`false and misleading at all relevant times.
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`The Truth Emerges
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`32.
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`On February 2, 2021, Immunovant issued a press release “announc[ing] a voluntary
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`pause of dosing in its ongoing clinical trials for IMVT-1401.” Specifically, that press release
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`disclosed, in relevant part:
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`The Company has become aware of a physiological signal consisting of elevated
`total cholesterol and LDL levels in IMVT-1401-treated patients in ASCEND GO-
`2, a Phase 2b trial in [TED]. Cholesterol levels were not measured in prior clinical
`trials of IMVT-1401 in [MG] and in healthy subjects. Out of an abundance of
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`caution, the Company has decided to voluntarily pause dosing in ongoing clinical
`studies in both TED and in [WAIHA], in order to inform patients, investigators,
`and regulators as well as to modify the monitoring program.
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`ASCEND GO-2 is a randomized, placebo-controlled trial in TED evaluating
`different doses, each given weekly for 12 weeks. In this study, cholesterol
`parameters are assessed at baseline, at twelve weeks, and at week 20 following
`eight weeks off drug. Based on preliminary, unblinded data from about 40 patients
`through week 12, mean LDL cholesterol at week 12 was increased by
`approximately 65% in the 680mg dose group, by approximately 40% in the 340mg
`dose group, and did not increase in the control group. Average HDL and
`triglyceride levels increased to a much lesser degree. For context, commercially
`available statins report a reduction in LDL cholesterol between 27-60%. At the
`twenty-week timepoint, average LDL levels had declined to baseline or lower in
`the 680mg dose group, in the 340mg dose group, and in the control group.
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`33.
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`On this news, Immunovant’s stock price fell $18.22 per share, or 42.08%, to close
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`at $25.08 per share on February 2, 2021.
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`34.
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`As a result of Defendants’ wrongful acts and omissions, and the precipitous decline
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`in the market value of the Company’s securities, Plaintiff and other Class members have suffered
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`significant losses and damages.
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`PLAINTIFF’S CLASS ACTION ALLEGATIONS
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`35.
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`Plaintiff brings this action as a class action pursuant to Federal Rule of Civil
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`Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or otherwise
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`acquired Immunovant securities during the Class Period (the “Class”); and were damaged upon
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`the revelation of the alleged corrective disclosures. Excluded from the Class are Defendants
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`herein, the officers and directors of the Company, at all relevant times, members of their immediate
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`families and their legal representatives, heirs, successors or assigns and any entity in which
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`Defendants have or had a controlling interest.
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`36.
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`The members of the Class are so numerous that joinder of all members is
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`impracticable. Throughout the Class Period, Immunovant securities were actively traded on the
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`NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time and can
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`be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds or
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`thousands of members in the proposed Class. Record owners and other members of the Class may
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`be identified from records maintained by Immunovant or its transfer agent and may be notified of
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`the pendency of this action by mail, using the form of notice similar to that customarily used in
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`securities class actions.
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`37.
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`Plaintiff’s claims are typical of the claims of the members of the Class as all
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`members of the Class are similarly affected by Defendants’ wrongful conduct in violation of
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`federal law that is complained of herein.
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`38.
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`Plaintiff will fairly and adequately protect the interests of the members of the Class
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`and has retained counsel competent and experienced in class and securities litigation. Plaintiff has
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`no interests antagonistic to or in conflict with those of the Class.
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`39.
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`Common questions of law and fact exist as to all members of the Class and
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`predominate over any questions solely affecting individual members of the Class. Among the
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`questions of law and fact common to the Class are:
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`whether the federal securities laws were violated by Defendants’ acts as alleged
`herein;
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`whether statements made by Defendants to the investing public during the Class
`Period misrepresented material facts about the business, operations and
`management of Immunovant;
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`whether the Individual Defendants caused Immunovant to issue false and
`misleading financial statements during the Class Period;
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`whether Defendants acted knowingly or recklessly in issuing false and misleading
`financial statements;
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`whether the prices of Immunovant securities during the Class Period were
`artificially inflated because of the Defendants’ conduct complained of herein; and
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`whether the members of the Class have sustained damages and, if so, what is the
`proper measure of damages.
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`40.
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`A class action is superior to all other available methods for the fair and efficient
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`adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the
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`damages suffered by individual Class members may be relatively small, the expense and burden
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`of individual litigation make it impossible for members of the Class to individually redress the
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`wrongs done to them. There will be no difficulty in the management of this action as a class action.
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`41.
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`Plaintiff will rely, in part, upon the presumption of reliance established by the fraud-
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`on-the-market doctrine in that:
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`Defendants made public misrepresentations or failed to disclose material facts
`during the Class Period;
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`the omissions and misrepresentations were material;
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`Immunovant securities are traded in an efficient market;
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`the Company’s shares were liquid and traded with moderate to heavy volume
`during the Class Period;
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`the Company traded on the NASDAQ and was covered by multiple analysts;
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`the misrepresentations and omissions alleged would tend to induce a reasonable
`investor to misjudge the value of the Company’s securities; and
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`Plaintiff and members of the Class purchased, acquired and/or sold Immunovant
`securities between the time the Defendants failed to disclose or misrepresented
`material facts and the time the true facts were disclosed, without knowledge of
`the omitted or misrepresented facts.
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`42.
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`Based upon the foregoing, Plaintiff and the members of the Class are entitled to a
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`presumption of reliance upon the integrity of the market.
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`43.
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`Alternatively, Plaintiff and the members of the Class are entitled to the presumption
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`of reliance established by the Supreme Court in Affiliated Ute Citizens of the State of Utah v.
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`United States, 406 U.S. 128, 92 S. Ct. 2430 (1972), as Defendants omitted material information in
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`their Class Period statements in violation of a duty to disclose such information, as detailed above.
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`COUNT I
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` (Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Promulgated Thereunder
`Against All Defendants)
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`44.
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`Plaintiff repeats and re-alleges each and every allegation contained above as if fully
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`set forth herein.
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`45.
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`This Count is asserted against Defendants and is based upon Section 10(b) of the
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`Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC.
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`46.
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`During the Class Period, Defendants engaged in a plan, scheme, conspiracy and
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`course of conduct, pursuant to which they knowingly or recklessly engaged in acts, transactions,
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`practices and courses of business which operated as a fraud and deceit upon Plaintiff and the other
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`members of the Class; made various untrue statements of material facts and omitted to state
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`material facts necessary in order to make the statements made, in light of the circumstances under
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`which they were made, not misleading; and employed devices, schemes and artifices to defraud in
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`connection with the purchase and sale of securities. Such scheme was intended to, and, throughout
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`the Class Period, did: (i) deceive the investing public, including Plaintiff and other Class members,
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`as alleged herein; (ii) artificially inflate and maintain the market price of Immunovant securities;
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`and (iii) cause Plaintiff and other members of the Class to purchase or otherwise acquire
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`Immunovant securities and options at artificially inflated prices. In furtherance of this unlawful
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`scheme, plan and course of conduct, Defendants, and each of them, took the actions set forth
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`herein.
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`47.
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`Pursuant to the above plan, scheme, conspiracy and course of conduct, each of the
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`Defendants participated directly or indirectly in the preparation and/or issuance of the quarterly
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`and annual reports, SEC filings, press releases and other statements and documents described
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`above, including statements made to securities analysts and the media that were designed to
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`influence the market for Immunovant securities. Such reports, filings, releases and statements
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`were materially false and misleading in that they failed to disclose material adverse information
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`and misrepresented the truth about Immunovant’s finances and business prospects.
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`48.
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` By virtue of their positions at Immunovant, Defendants had actual knowledge of
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`the materially false and misleading statements and material omissions alleged herein and intended
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`thereby to deceive Plaintiff and the other members of the Class, or, in the alternative, Defendants
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`acted with reckless disregard for the truth in that they failed or refused to ascertain and disclose
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`such facts as would reveal the materially false and misleading nature of the statements made,
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`although such facts were readily available to Defendants. Said acts and omissions of Defendants
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`were committed willfully or with reckless disregard for the truth. In addition, each Defendant
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`knew or recklessly disregarded that material facts were being misrepresented or omitted as
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`described above.
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`49.
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`Information showing that Defendants acted knowingly or with reckless disregard
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`for the truth is peculiarly within Defendants’ knowledge and control. As the senior managers
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`and/or directors of Immunovant, the Individual Defendants had knowledge of the details of
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`Immunovant’s internal affairs.
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`50.
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`The Individual Defendants are liable both directly and indirectly for the wrongs
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`complained of herein. Because of their positions of control and authority, the Individual
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`Defendants were able to and did, directly or indirectly, control the content of the statements of
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`Immunovant. As officers and/or directors of a publicly-held company, the Individual Defendants
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`had a duty to disseminate timely, accurate, and truthful information with respect to Immunovant’s
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`Case 1:21-cv-00918 Document 1 Filed 02/19/21 Page 15 of 21 PageID #: 15
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`
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`businesses, operations, future financial condition and future prospects. As a result of the
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`dissemination of the aforementioned false and misleading reports, releases and public statements,
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`the market price of Immunovant securities was artificially inflated throughout the Class Period. In
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`ignorance of the adverse facts concerning Immunovant’s business and financial condition which
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`were concealed by Defendants, Plaintiff and the other members of the Class purchased or
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`otherwise acquired Immunovant securities at artificially inflated prices and relied upon the price
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`of the securities, the integrity of the market for the securities and/or upon statements disseminated
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`by Defendants, and were damaged thereby.
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`51.
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`During the Class Period, Immunovant securities were traded on an active and
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`efficient market. Plaintiff and the other members of the Class, relying on the materially false and
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`misleading statements described herein, which the Defendants made, issued or caused to be
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`disseminated, or relying upon the integrity of the market, purchased or otherwise acquired shares
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`of Immunovant securities at prices artificially inflated by Defendants’ wrongful conduct. Had
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`Plaintiff and the other members of the Class known the truth, they would not have purchased or
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`otherwise acquired said securities, or would not have purchased or otherwise acquired them at the
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`inflated prices that were paid. At the time of the purchases and/or acquisitions by Plaintiff and the
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`Class, the true value of Immunovant securities was substantially lower than the prices paid by
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`Plaintiff and the other members of the Class. The market price of Immunovant securities declined
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`sharply upon public disclosure of the facts alleged herein to the injury of Plaintiff and Class
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`members.
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`52.
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`By reason of the conduct alleged herein, Defendants knowingly or recklessly,
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`directly or indirectly, have violated Section 10(b) of the Exchange Act and Rule 10b-5
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`promulgated thereunder.
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`53.
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`As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and the
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`other members of the Class suffered damages in connection with their respective purchases,
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`acquisitions and sales of the Company’s securities during the Class Period, upon the disclosure
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`that the Company had been disseminating misrepresented financial statements to the investing
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`public.
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`COUNT II
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` (Violations of Section 20(a) of the Exchange Act Against the Individual Defendants)
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`54.
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`Plaintiff repeats and re-alleges each and every allegation contained in the foregoing
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`paragraphs as if fully set forth herein.
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`55.
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`During the Class Period, the Individual Defendants participated in the operation
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`and management of Immunovant, and conducted and participated, directly and indirectly, in the
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`conduct of Immunovant’s business affairs. Because of their senior positions, they knew the
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`adverse non-public information about Immunovant’s misstatement of income and expenses and
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`false financial statements.
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`56.
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`As officers and/or directors of a publicly owned company, the Individual
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`Defendants had a duty to disseminate accurate and truthful information with respect to
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`Immunovant’s financial condition and results of operations, and to correct promptly any public
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`statements issued by Immunovant which had become materially false or misleading.
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`57.
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`Because of their positions of control and authority as senior officers, the Individual
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`Defendants were able to, and did, control the contents of the various reports, press releases and
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`public filings which Immunovant disseminated in the marketplace during the Class Period
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`concerning Immunovant’s results of operations. Throughout the Class Period, the Individual
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`Defendants exercised their power and authority to cause Immunovant to engage in the wrongful
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`16
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`acts complained of herein. The Individual Defendants, therefore, were “controlling persons” of
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`Immunovant within the meaning of Section 20(a) of the Exchange Act. In this capacity, they
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`participated in the unlawful conduct alleged which artificially inflated the market price of
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`Immunovant securities.
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`58.
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`Each of the Individual Defendants, therefore, acted as a controlling person of
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`Immunovant. By reason of their senior management positions and/or being directors of
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`