` Case No. 1:20-CV-812
`
`CLASS ACTION COMPLAINT FOR
`VIOLATIONS OF THE FEDERAL
`SECURITIES LAWS
`
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`v.
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`
`
`
`
`
`
`
`Plaintiff,
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`Defendants.
`
`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF NORTH CAROLINA
`
`JIM CHAPMAN, Individually and On
`Behalf of All Others Similarly Situated,
`
`
`
`
`
`FENNEC PHARMACEUTICALS INC.,
`ROSTISLAV RAYKOV, and ROBERT
`ANDRADE,
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`
`
`
`
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`Plaintiff Jim Chapman (“Plaintiff”), individually and on behalf of all others
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`similarly situated, by and through his attorneys, alleges the following upon information
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`and belief, except as to those allegations concerning Plaintiff, which are alleged upon
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`personal knowledge. Plaintiff’s information and belief is based upon, among other things,
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`his counsel’s investigation, which includes without limitation: (a) review and analysis of
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`regulatory filings made by Fennec Pharmaceuticals Inc. (“Fennec” or the “Company”)
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`with the United States (“U.S.”) Securities and Exchange Commission (“SEC”); (b)
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`review and analysis of press releases and media reports issued by and disseminated by
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`Fennec; and (c) review of other publicly available information concerning Fennec.
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`NATURE OF THE ACTION AND OVERVIEW
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`1.
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`This is a class action on behalf of persons and entities that purchased or
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`otherwise acquired Fennec securities between February 11, 2020 and August 10, 2020,
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`inclusive (the “Class Period”). Plaintiff pursues claims against the Defendants under the
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`Securities Exchange Act of 1934 (the “Exchange Act”).
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`2.
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`Fennec is a biopharmaceutical company that purportedly focuses on the
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`development of PEDMARK, a sodium thiosulfate anhydrous injection, for the prevention
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`of platinum-induced ototoxicity in pediatric cancer patients.
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`3.
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`On August 11, 2020, before the market opened, Fennec disclosed that it had
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`received a Complete Response Letter (“CRL”) from the U.S. Food and Drug
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`Administration (“FDA”) regarding the Company’s New Drug Application (“NDA”) for
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`PEDMARK. According to the CRL, “after recent completion of a pre-approval
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`1
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`inspection of the manufacturing facility of [Fennec’s] drug product manufacturer, the
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`FDA identified deficiencies resulting in a Form 483, which is a list of conditions or
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`practices that are required to be resolved prior to the approval of PEDMARK.”
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`4.
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`On this news, the Company’s share price fell $3.51, or 34%, to close at
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`$6.66 per share on August 11, 2020, on unusually heavy trading volume.
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`5.
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`Throughout the Class Period, Defendants made materially false and/or
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`misleading statements, as well as failed to disclose material adverse facts about the
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`Company’s business, operations, and prospects. Specifically, Defendants failed to
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`disclose to investors: (1) that the manufacturing facilities for PEDMARK, the Company’s
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`sole product candidate, did not comply with current good manufacturing practices; (2)
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`that, as a result, regulatory approval for PEDMARK was reasonably likely to be delayed;
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`and (3) that, as a result of the foregoing, Defendants’ positive statements about the
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`Company’s business, operations, and prospects were materially misleading and/or lacked
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`a reasonable basis.
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`6.
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`As a result of Defendants’ wrongful acts and omissions, and the precipitous
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`decline in the market value of the Company’s securities, Plaintiff and other Class
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`members have suffered significant losses and damages.
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`JURISDICTION AND VENUE
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`7.
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`The claims asserted herein arise under Sections 10(b) and 20(a) of the
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`Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder
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`by the SEC (17 C.F.R. § 240.10b-5).
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`2
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`8.
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`This Court has jurisdiction over the subject matter of this action pursuant to
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`28 U.S.C. § 1331 and Section 27 of the Exchange Act (15 U.S.C. § 78aa).
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`9.
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`Venue is proper in this Judicial District pursuant to 28 U.S.C. § 1391(b)
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`and Section 27 of the Exchange Act (15 U.S.C. § 78aa(c)). Substantial acts in furtherance
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`of the alleged fraud or the effects of the fraud have occurred in this Judicial District.
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`Many of the acts charged herein, including the dissemination of materially false and/or
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`misleading information, occurred in substantial part in this Judicial District. In addition,
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`the Company’s principal executive offices are located in this District.
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`10.
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`In connection with the acts, transactions, and conduct alleged herein,
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`Defendants directly and indirectly used the means and instrumentalities of interstate
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`commerce, including the United States mail, interstate telephone communications, and
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`the facilities of a national securities exchange.
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`PARTIES
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`11.
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`Plaintiff Jim Chapman, as set forth in the accompanying certification,
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`incorporated by reference herein, purchased Fennec securities during the Class Period,
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`and suffered damages as a result of the federal securities law violations and false and/or
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`misleading statements and/or material omissions alleged herein.
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`12. Defendant Fennec is incorporated under the laws of British Columbia,
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`Canada with its principal executive offices located in Research Triangle Park, North
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`Carolina. Fennec’s common stock trades on the NASDAQ exchange under the symbol
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`“FENC.”
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`3
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`13. Defendant Rostislav Raykov (“Raykov”) was the Company’s Chief
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`Executive Officer (“CEO”) at all relevant times.
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`14. Defendant Robert Andrade (“Andrade”) was the Company’s Chief
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`Financial Officer (“CFO”) at all relevant times.
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`15. Defendants Raykov
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`and Andrade
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`(collectively
`
`the
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`“Individual
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`Defendants”), because of their positions with the Company, possessed the power and
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`authority to control the contents of the Company’s reports to the SEC, press releases and
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`presentations to securities analysts, money and portfolio managers and institutional
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`investors, i.e., the market. The Individual Defendants were provided with copies of the
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`Company’s reports and press releases alleged herein to be misleading prior to, or shortly
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`after, their issuance and had the ability and opportunity to prevent their issuance or cause
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`them to be corrected. Because of their positions and access to material non-public
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`information available to them, the Individual Defendants knew that the adverse facts
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`specified herein had not been disclosed to, and were being concealed from, the public,
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`and that the positive representations which were being made were then materially false
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`and/or misleading. The Individual Defendants are liable for the false statements pleaded
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`herein.
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`4
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`SUBSTANTIVE ALLEGATIONS
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`Background
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`16.
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`Fennec is a biopharmaceutical company that purportedly focuses on the
`
`development of PEDMARK, a sodium thiosulfate anhydrous injection, for the prevention
`
`of platinum-induced ototoxicity in pediatric cancer patients.
`
`Materially False and Misleading
`Statements Issued During the Class Period
`
`17.
`
`The Class Period begins on February 11, 2020. On that day, Fennec
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`announced that it had completed its rolling submission of its NDA for PEDMARK.
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`Specifically, in a press release, the Company stated, in relevant part:
`
` Fennec Pharmaceuticals Inc. (Nasdaq:FENC; TSX: FRX), a specialty
`pharmaceutical company, today announced it has completed its rolling
`submission of a New Drug Application (NDA) to the U.S. Food and Drug
`Administration (FDA) for PEDMARKTM (a unique formulation of sodium
`thiosulfate) for intravenous use and submitted a Marketing Authorization
`Application (MAA) to the European Medicines Agency (EMA) for sodium
`thiosulfate (tradename to be determined). The PEDMARKTM indication
`requested is for the prevention of ototoxicity induced by cisplatin
`chemotherapy in patients one month to < 18 years of age with localized,
`non-metastatic, solid tumors.
`
`Fennec’s PEDMARK regulatory submissions follow: a pre-NDA meeting
`with the FDA in December 2018 after which Fennec initiated a rolling
`NDA; and pre-submission meetings with the EMA and an approved
`pediatric investigation plan (PIP). Both applications are based upon clinical
`results from two pivotal Phase 3 clinical trials:
`
`• SIOPEL 6 conducted by the International Childhood Liver Tumor
`Strategy Group (SIOPEL) with results published in the New England
`Journal of Medicine in June 2018
`
`and
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`5
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`• ACCL0431 conducted by the Children’s Oncology Group (COG)
`with results published in Lancet Oncology in 2016.
`
`“At Fennec, we are dedicated to the development of PEDMARK for the
`prevention of ototoxicity in children. The completion of these regulatory
`submissions to the FDA and EMA are the culmination of many years of
`hard work, bringing us one step closer to achieving our mission,” said
`Rosty Raykov, chief executive officer of Fennec.
`
`18. On February 14, 2020, Fennec provided a business update and announced
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`its fiscal 2019 financial results in a press release that stated, in relevant part:
`
`NDA (New Drug Application) and Marketing Authorization Application
`(MAA) completed in February 2020
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`Commercial readiness activities in U.S. underway for potential launch of
`PEDMARKTM, if approved, in the second half of 2020
`
`Solid financial position with $13.7 million and no debt and the option to
`access $12.5 million in debt financing upon NDA approval of PEDMARK
`
`*
`
`*
`
`*
`
`"Fennec made great progress in 2019 preparing for some important
`milestones in 2020 including the recent announcement of regulatory
`submissions in both the U.S. and EU for PEDMARK” said Rosty Raykov,
`chief executive officer of Fennec. "During the year we also made solid
`progress in preparing for the potential launch of PEDMARK including the
`hiring of a chief commercial officer and the preparation and execution of
`our commercial readiness plan. We look forward to a number of significant
`milestones throughout 2020. If PEDMARK is granted a Priority Review,
`the Prescription Drug User Fee Act (PDUFA) action date is expected in the
`third quarter of 2020.”
`
`19.
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`The same day, the Company filed its annual report on Form 10-K with the
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`SEC for the period ended December 31, 2019 (the “2019 10-K”). Therein, Fennec stated,
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`in relevant part:
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`6
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`Regulatory approval of our product candidate is time-consuming,
`expensive and uncertain, and could result in unexpectedly high expenses
`and delay our ability to sell our product.
`
`Development, manufacture and marketing of our product is subject to
`extensive regulation by governmental authorities in the United States and
`other countries. This regulation could require us to incur significant
`unexpected expenses or delay or limit our ability to sell our product
`candidate. . . .
`
`*
`
`*
`
`*
`
`We and our third-party manufacturers are also required to comply with
`the applicable current FDA Good Manufacturing Practices regulations,
`which include requirements relating to quality control and quality
`assurance, as well as the corresponding maintenance of records and
`documentation. Further, manufacturing facilities, which we outsource to
`third parties, must be approved by the FDA before they can be used to
`manufacture our product, and they are subject to additional FDA
`inspection. If we fail to comply with any of the FDA’s continuing
`regulations, we could be subject to reputational harm and sanctions,
`including:
`
`• delays, warning letters and fines;
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`• product recalls or seizures and injunctions on sales;
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`• refusal of the FDA to review pending applications;
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`•
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`total or partial suspension of production;
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`• withdrawals of previously approved marketing applications; and
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`• civil penalties and criminal prosecutions.
`In addition, identification of side effects after a drug is on the market or the
`occurrence of manufacturing problems could cause subsequent withdrawal
`of approval, reformulation of the drug, additional testing or changes in
`labeling of the product.
`
`(Emphasis added.)
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`20. Moreover, the 2019 10-K stated, with respect to manufacturing:
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`7
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`If our third-party manufacturers breach or terminate their agreements
`with us, or if we are unable to secure arrangements with third party
`manufacturers on acceptable terms as needed in the future, we may
`suffer significant delays and additional costs.
`
`We have no experience manufacturing products and do not currently have
`the resources to manufacture any products that we may develop. We
`currently have agreements with contract manufacturers for clinical supplies
`of PEDMARKTM, including drug substance providers and drug product
`suppliers, but they might not perform as agreed in the future or may
`terminate our agreements with them before the end of the required term.
`Significant additional time and expense would be required to effect a
`transition to a new contract manufacturer.
`
`We plan to continue to rely on contract manufacturers for the foreseeable
`future to produce quantities of products and substances necessary for
`research and development, preclinical trials, human clinical trials and
`product commercialization, and to perform their obligations in a timely
`manner and in accordance with applicable government regulations. If we
`develop any product with commercial potential, we will need to develop the
`facilities to independently manufacture such product or products or secure
`arrangements with third parties to manufacture them. We may not be able
`to independently develop manufacturing capabilities or obtain favorable
`terms for the manufacture of our product. While we intend to contract for
`the commercial manufacture of our product candidate, we may not be able
`to identify and qualify contractors or obtain favorable contracting terms.
`We or our contract manufacturers may also fail to meet required
`manufacturing standards, which could result in delays or failures in
`product delivery, increased costs, injury or death to patients, product
`recalls or withdrawals and other problems that could significantly hurt
`our business. We intend to maintain a second source for back-up
`commercial manufacturing, wherever feasible. However, if a replacement
`to our future internal or contract manufacturers were required, the ability to
`establish second-sourcing or find a replacement manufacturer may be
`difficult due to the lead times generally required to manufacture drugs and
`the need for FDA compliance inspections and approvals of any replacement
`manufacturer, all of which factors could result in production delays and
`additional commercialization costs. Such lead times would vary based on
`the situation but might be twelve months or longer.
`
`(Emphasis added.)
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`21.
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`Specifically, with respect to the impact of manufacturing compliance on
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`FDA approval, the 2019 10-K stated, in relevant part:
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`The marketing approval processes of the FDA and comparable foreign
`authorities are lengthy, time-consuming and inherently unpredictable,
`and if we are ultimately unable to obtain marketing approval for our
`product candidate, our business will be substantially harmed.
`
`Our current product candidate has not gained marketing approval for sale in
`the United States or any other country, and we cannot guarantee that we
`will ever have any marketable products. Our business is substantially
`dependent on our ability to complete the development of, obtain marketing
`approval for, and successfully commercialize our product candidate in a
`timely manner. We cannot commercialize our product candidate in the
`United States without first obtaining approval from the FDA to market each
`product candidate. Similarly, we cannot commercialize our product
`candidate outside of the United States without obtaining regulatory
`approval from comparable foreign regulatory authorities. Our product
`candidate could fail to receive marketing approval for many reasons,
`including the following:
`
`•
`
`•
`
`. . .
`
`the FDA or comparable foreign regulatory authorities may find
`inadequate the manufacturing processes or facilities of third-party
`manufacturers with which we contract for clinical and commercial
`supplies; and
`
`. . .
`
`•
`Before obtaining marketing approval for the commercial sale of any drug
`product for a target indication, we must demonstrate in preclinical studies
`and well-controlled clinical trials and, with respect to approval in the
`United States, to the satisfaction of the FDA, that the product is safe and
`effective for its intended use and that the manufacturing facilities,
`processes, and controls are adequate to preserve the drug’s identity,
`strength, quality and purity. In the United States, it is necessary to submit
`and obtain approval of a New Drug Application, or NDA, from the FDA.
`An NDA must include extensive preclinical and clinical data and
`supporting information to establish the product’s safety and efficacy for
`each desired indication. The NDA must also include significant information
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`regarding the chemistry, manufacturing, and controls for the product. After
`the submission of an NDA, but before approval of the NDA, the
`manufacturing facilities used to manufacture a product candidate
`generally must be inspected by the FDA to ensure compliance with the
`applicable Current Good Manufacturing Practice, or
`cGMP,
`requirements. The FDA and the Competent Authorities of the Member
`States of the European Economic Area, or EEA, and comparable foreign
`regulatory authorities, may also inspect our clinical trial sites and audit
`clinical study data to ensure that our studies are properly conducted in
`accordance with
`the IND regulations, human subject protection
`regulations, and good clinical practice, or cGCP.
`
`. . . If the FDA requires additional studies or data, we would incur increased
`costs and delays in the marketing approval process, which may require us
`to expend more resources than we have available. In addition, the FDA
`might not consider any additional information to be complete or sufficient
`to support the filing or approval of the NDA.
`
`(Emphases added.)
`
`22. On April 13, 2020, the Company announced that the FDA has accepted
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`Fennec’s NDA and granted priority review. Specifically, Fennec’s press release stated, in
`
`relevant part:
`
`Fennec Pharmaceuticals Inc. (Nasdaq: FENC; TSX: FRX), a specialty
`pharmaceutical company, announced today that the U.S. Food and Drug
`Administration (FDA) has accepted for filing and granted Priority Review
`for the company’s New Drug Application (NDA) for PEDMARK™ (a
`unique formulation of sodium thiosulfate). PEDMARK is an investigational
`drug for the prevention of ototoxicity induced by cisplatin chemotherapy in
`patients one month to <18 years of age with localized, non-metastatic, solid
`tumors.
`
`"The FDA filing acceptance of our NDA and granting of Priority Review
`represents a significant milestone in the development of PEDMARK and
`we look forward to working closely with the Agency during this review
`process,” said Rosty Raykov, chief executive officer of Fennec.
`
`The FDA grants Priority Review to applications for medicines that treat a
`serious condition, and, if approved, would demonstrate the potential to be a
`significant improvement in the safety or effectiveness of the treatment,
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`10
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`diagnosis, or prevention of a serious condition. Priority Review designation
`shortens the review period from the standard ten months to six months from
`the submission of the NDA. The FDA set a Prescription Drug User Fee Act
`(PDUFA) target action date of August 10, 2020 for the completion of
`FDA’s review.
`
`23. On May 14, 2020, the Company issued a press release announcing its first
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`quarter 2020 financial results and providing a business update, which stated, in relevant
`
`part:
`
`“We continue our strong momentum across our operations throughout early
`2020,”
`said Rosty Raykov, chief executive officer of Fennec
`Pharmaceuticals. "Following the recent announcement of regulatory
`submission in the U.S. in February, we were pleased to have been granted
`Priority Review and a PDUFA date of August 10, 2020. Further, we
`continue to make progress on our commercial readiness plan in preparation
`for the potential launch of PEDMARK, if approved, in the second half of
`2020. Finally, we significantly strengthened our balance sheet with an over-
`subscribed follow-on public offering that will allow us to support the
`commercial launch of PEDMARK and the potential growth period ahead.”
`
`24. On August 5, 2020, Fennec announced its second quarter 2020 financial
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`results and provided a business update, stating in a press release, in relevant part:
`
`“We continue to work with the FDA as a part of their review process in
`advance of the pending PEDMARKTM PDUFA date of August 10,” said
`Rosty Raykov, chief executive officer of Fennec Pharmaceuticals. "Our
`organization and commercial team have been actively preparing for launch
`readiness, and, as we await the FDA’s decision, we believe that we are well
`positioned to commercialize PEDMARK, if approved, during the third
`quarter of 2020.”
`
`25.
`
`The above statements identified in ¶¶ 17-24 were materially false and/or
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`misleading, and failed to disclose material adverse facts about the Company’s business,
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`operations, and prospects. Specifically, Defendants failed to disclose to investors: (1)
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`that the manufacturing facilities for PEDMARK, the Company’s sole product candidate,
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`11
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`did not comply with current good manufacturing practices; (2) that, as a result, regulatory
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`approval for PEDMARK was reasonably likely to be delayed; and (3) that, as a result of
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`the foregoing, Defendants’ positive statements about the Company’s business, operations,
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`and prospects were materially misleading and/or lacked a reasonable basis.
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`Disclosures at the End of the Class Period
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`26. On August 11, 2020, before the market opened, Fennec disclosed that it had
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`received a CRL from the FDA regarding the Company’s NDA for PEDMARK.
`
`According to the press release:
`
`According to the CRL, after recent completion of a pre-approval inspection
`of the manufacturing facility of our drug product manufacturer, the FDA
`identified deficiencies resulting in a Form 483, which is a list of conditions
`or practices that are required to be resolved prior to the approval of
`PEDMARK™. The Company plans to request a Type A meeting to discuss
`the issues and other matters that were described in the CRL pertaining to
`the steps required for the resubmission of the NDA for PEDMARK™.
`Importantly, no clinical safety or efficacy issues were identified during the
`review and there is no requirement for further clinical data.
`
`27. On this news, the Company’s share price fell $3.51, or 34%, to close at
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`$6.66 per share on August 11, 2020, on unusually heavy trading volume.
`
`CLASS ACTION ALLEGATIONS
`
`28.
`
`Plaintiff brings this action as a class action pursuant to Federal Rule of
`
`Civil Procedure 23(a) and (b)(3) on behalf of a class, consisting of all persons and entities
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`that purchased or otherwise acquired Fennec securities between February 11, 2020 and
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`August 10, 2020, inclusive, and who were damaged thereby (the “Class”). Excluded
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`from the Class are Defendants, the officers and directors of the Company, at all relevant
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`12
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`times, members of their immediate families and their legal representatives, heirs,
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`successors, or assigns, and any entity in which Defendants have or had a controlling
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`interest.
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`29.
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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, Fennec’s common shares actively traded on
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`the NASDAQ. While the exact number of Class members is unknown to Plaintiff at this
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`time and can only be ascertained through appropriate discovery, Plaintiff believes that
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`there are at least hundreds or thousands of members in the proposed Class. Millions of
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`Fennec common stock were traded publicly during the Class Period on the NASDAQ.
`
`Record owners and other members of the Class may be identified from records
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`maintained by Fennec or its transfer agent and may be notified of the pendency of this
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`action by mail, using the form of notice similar to that customarily used in securities class
`
`actions.
`
`30.
`
`Plaintiff’s claims are typical of the claims of the members of the Class as
`
`all members of the Class are similarly affected by Defendants’ wrongful conduct in
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`violation of federal law that is complained of herein.
`
`31.
`
`Plaintiff will fairly and adequately protect the interests of the members of
`
`the Class and has retained counsel competent and experienced in class and securities
`
`litigation.
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`13
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`32. 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 questions of law and fact common to the Class are:
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`(a) whether the federal securities laws were violated by Defendants’ acts
`
`as alleged herein;
`
`(b) whether statements made by Defendants to the investing public
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`during the Class Period omitted and/or misrepresented material facts about the business,
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`operations, and prospects of Fennec; and
`
`(c)
`
`to what extent the members of the Class have sustained damages and
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`the proper measure of damages.
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`33. A class action is superior to all other available methods for the fair and
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`efficient adjudication of this controversy since joinder of all members is impracticable.
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`Furthermore, as the damages suffered by individual Class members may be relatively
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`small, the expense and burden of individual litigation makes it impossible for members of
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`the Class to individually redress the wrongs done to them. There will be no difficulty in
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`the management of this action as a class action.
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`UNDISCLOSED ADVERSE FACTS
`
`34.
`
`The market for Fennec’s securities was open, well-developed and efficient
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`at all relevant times. As a result of these materially false and/or misleading statements,
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`and/or failures to disclose, Fennec’s securities traded at artificially inflated prices during
`
`the Class Period. Plaintiff and other members of the Class purchased or otherwise
`
`14
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`acquired Fennec’s securities relying upon the integrity of the market price of the
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`Company’s securities and market information relating to Fennec, and have been damaged
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`thereby.
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`35. During the Class Period, Defendants materially misled the investing public,
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`thereby inflating the price of Fennec’s securities, by publicly issuing false and/or
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`misleading statements and/or omitting to disclose material facts necessary to make
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`Defendants’ statements, as set forth herein, not false and/or misleading. The statements
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`and omissions were materially false and/or misleading because they failed to disclose
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`material adverse information and/or misrepresented the truth about Fennec’s business,
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`operations, and prospects as alleged herein.
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`36. At all relevant times, the material misrepresentations and omissions
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`particularized in this Complaint directly or proximately caused or were a substantial
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`contributing cause of the damages sustained by Plaintiff and other members of the Class.
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`As described herein, during the Class Period, Defendants made or caused to be made a
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`series of materially false and/or misleading statements about Fennec’s financial well-
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`being and prospects. These material misstatements and/or omissions had the cause and
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`effect of creating in the market an unrealistically positive assessment of the Company and
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`its financial well-being and prospects, thus causing the Company’s securities to be
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`overvalued and artificially inflated at all relevant times. Defendants’ materially false
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`and/or misleading statements during the Class Period resulted in Plaintiff and other
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`15
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`Case 1:20-cv-00812-UA-JLW Document 1 Filed 09/03/20 Page 16 of 27
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`members of the Class purchasing the Company’s securities at artificially inflated prices,
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`thus causing the damages complained of herein when the truth was revealed.
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`LOSS CAUSATION
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`37. Defendants’ wrongful conduct, as alleged herein, directly and proximately
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`caused the economic loss suffered by Plaintiff and the Class.
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`38. During the Class Period, Plaintiff and the Class purchased Fennec’s
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`securities at artificially inflated prices and were damaged thereby. The price of the
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`Company’s securities significantly declined when the misrepresentations made to the
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`market, and/or the information alleged herein to have been concealed from the market,
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`and/or the effects thereof, were revealed, causing investors’ losses.
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`SCIENTER ALLEGATIONS
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`39. As alleged herein, Defendants acted with scienter since Defendants knew
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`that the public documents and statements issued or disseminated in the name of the
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`Company were materially false and/or misleading; knew that such statements or
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`documents would be issued or disseminated to the investing public; and knowingly and
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`substantially participated or acquiesced in the issuance or dissemination of such
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`statements or documents as primary violations of the federal securities laws. As set forth
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`elsewhere herein in detail, the Individual Defendants, by virtue of their receipt of
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`information reflecting the true facts regarding Fennec, their control over, and/or receipt
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`and/or modification of Fennec’s allegedly materially misleading misstatements and/or
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`16
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`their associations with the Company which made them privy to confidential proprietary
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`information concerning Fennec, participated in the fraudulent scheme alleged herein.
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`APPLICABILITY OF PRESUMPTION OF RELIANCE
`(FRAUD-ON-THE-MARKET DOCTRINE)
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`40.
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`The market for Fennec’s securities was open, well-developed and efficient
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`at all relevant times. As a result of the materially false and/or misleading statements
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`and/or failures to disclose, Fennec’s securities traded at artificially inflated prices during
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`the Class Period. On August 10, 2020, the Company’s share price closed at a Class
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`Period high of $10.17 per share. Plaintiff and other members of the Class purchased or
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`otherwise acquired the Company’s securities relying upon the integrity of the market
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`price of Fennec’s securities and market information relating to Fennec, and have been
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`damaged thereby.
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`41. During the Class Period, the artificial inflation of Fennec’s shares was
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`caused by the material misrepresentations and/or omissions particularized in this
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`Complaint causing the damages sustained by Plaintiff and other members of the Class.
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`As described herein, during the Class Period, Defendants made or caused to be made a
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`series of materially false and/or misleading statements about Fennec’s business,
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`prospects, and operations. These material misstatements and/or omissions created an
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`unrealistically positive assessment of Fennec and its business, operations, and prospects,
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`thus causing the price of the Company’s securities to be artificially inflated at all relevant
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`times, and when disclosed, negatively affected the value of the Company shares.
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`Defendants’ materially false and/or misleading statements during the Class Period
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`17
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`resulted in Plaintiff and other members of the Class purchasing the Company’s securities
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`at such artificially inflated prices, and each of them has been damaged as a result.
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`42. At all relevant times, the market for Fennec’s se