Business Context and Reporting Period
This Form 6-K filing by Akari Therapeutics Plc, dated May 30, 2017, addresses a significant corporate governance and clinical trial data integrity issue. The Company established a special committee to investigate the involvement of personnel with a retracted research report by Edison Investment Research Ltd. and the accuracy of interim Phase 2 trial results for its drug Coversin.
Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on legal, operational, and clinical trial matters rather than financial performance metrics.
Material Changes
- Executive Leadership: Dr. Gur Roshwalb, Chief Executive Officer and Board member, resigned effective May 29, 2017, following a determination that he improperly reviewed and approved the Edison Report in contravention of Company policy. Dr. Ray Prudo, Executive Chairman, assumed interim CEO duties.
- Clinical Trial Data Correction: The Company corrected its April 24, 2017 press release regarding the Phase 2 PNH trial of Coversin. It was determined that the fifth patient, previously reported to have met the primary endpoint, did not actually meet the endpoint. The patient was withdrawn due to a suspected co-morbidity unrelated to treatment.
- Legal Proceedings: Two putative class action lawsuits were filed in May 2017 in the U.S. District Court for the Southern District of New York against the Company, the CEO, and the CFO. These actions allege federal securities law violations related to the Company's communications regarding the Edison Report.
Outlook, Risks, and Contingencies
The Company expects to release additional results for the four continuing patients in the Phase 2 PNH trial in approximately four weeks. Significant risks include potential governmental investigations and proceedings regarding the Edison Report and the inaccurate press release. The Company has voluntarily reported the investigation to the SEC. While the Company intends to vigorously defend against the pending class actions, it cannot predict the timing, outcome, or financial impact of these lawsuits or any potential regulatory actions on its business, operations, or financial condition.
Key Facts for Investor Verification
- Confirmation of the resignation of CEO Dr. Gur Roshwalb and the appointment of Dr. Ray Prudo as interim CEO.
- Verification of the corrected clinical data regarding the fifth patient in the Coversin Phase 2 PNH trial.
- Status of the two pending class action lawsuits (Case 1:17-cv-03577 and Case 1:17-cv-03783) and any service of summons.
- Updates on any governmental investigations initiated by the SEC or other authorities.
- The timeline for the release of updated Phase 2 trial results for the remaining four patients.