Moore v. Checkpoint Therapeutics, Inc.

Background

James Moore filed a proposed securities class action on behalf of people who purchased Checkpoint Therapeutics, Inc. shares between March 10, 2021, and December 15, 2023. The complaint alleges that Checkpoint made positive statements about its business, prospects, and lead antibody product candidate, cosibelimab, including the progress toward possible approval by the Food and Drug Administration. On December 18, 2023, Checkpoint announced that the Food and Drug Administration had declined to approve cosibelimab because of concerns about Checkpoint’s third-party contract manufacturing organization. Checkpoint’s stock price then fell 44.9 percent, closing at $1.83 per share.

The Private Securities Litigation Reform Act governs the selection of a lead plaintiff and lead counsel in proposed federal securities class actions. The court must appoint the person most capable of adequately representing the class. The law creates a presumption in favor of a person who timely seeks appointment, has the largest financial interest in the relief sought, and preliminarily satisfies the requirements for class representation under Federal Rule of Civil Procedure 23.

Lead Plaintiff

Hamilton Bailey timely moved for appointment as lead plaintiff. He certified that he bought 108,560 Checkpoint shares during the proposed class period and lost $94,155.95 when the share price fell. Because no proposed lead plaintiff with a larger financial interest remained, the court treated Bailey’s financial interest as sufficient for this stage.

The court also found Bailey’s claims typical of the proposed class because they arose from the same alleged statements, omissions, and stock-price decline as the other class members’ claims. The court found him adequate because he said he was willing to perform the duties of lead plaintiff, had counsel with significant securities-fraud experience, and showed no conflict with the proposed class. The court noted that the motion was unopposed but independently reviewed whether Bailey met the statutory requirements.

Lead Counsel and Ruling

Bailey selected Glancy Prongay & Murray LLP as counsel. After reviewing the firm’s submissions, including its experience litigating securities class actions, the court found the firm qualified to serve as lead counsel.

Judge Paul A. Engelmayer granted the motion and appointed Hamilton Bailey as lead plaintiff and Glancy Prongay & Murray LLP as lead counsel. The Clerk of Court was directed to terminate all pending motions. The parties were directed to confer and jointly file a proposed schedule by July 9, 2024, for an amended complaint and briefing on any motion to dismiss. The opinion addresses representation of the proposed class and does not decide the underlying securities-fraud allegations.