Thant v. Rain Oncology Inc.

Background

Rain Oncology, Inc. develops cancer treatments, including milademetan, also called RAIN-32. The complaint alleged that Rain had described early clinical-trial results as showing meaningful activity against certain solid tumors and had proceeded directly to a Phase 3 trial. On May 22, 2023, Rain announced that the trial had not met its primary measure of progression-free survival and that the dosing schedule had not been optimized before the trial began. The complaint alleged that Rain’s stock price fell from $9.93 to $1.22 over the next trading day.

Dr. Myo Thant filed the first action on July 14, 2023, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The court later received two motions seeking appointment as lead plaintiff and selection of lead counsel: one from Dr. Thant and one from Tony Serrano. Serrano later filed a statement of non-opposition to the competing motion.

Legal standard

The Private Securities Litigation Reform Act of 1995, or PSLRA, requires the court to appoint the “most adequate plaintiff” as lead plaintiff in a securities class action. The law creates a presumption in favor of an applicant who timely seeks appointment, has the largest financial interest in the requested relief, and meets the relevant requirements of Federal Rule of Civil Procedure 23. Those requirements include typicality—whether the plaintiff’s claims are typical of the class’s claims—and adequacy—whether the plaintiff can fairly and adequately represent the class.

The lead plaintiff generally selects the class’s lead counsel, subject to court approval. The court may choose different counsel if necessary to protect the class’s interests.

Court’s analysis

The court focused primarily on Dr. Thant’s unopposed motion. It found that he timely filed the motion and submitted the required sworn certification. Dr. Thant stated that he had purchased approximately 258,538 net shares and had lost almost $2 million. The court found that this was substantially greater than Serrano’s documented loss of approximately $9,595.

The court also found that Dr. Thant satisfied Rule 23’s typicality and adequacy requirements. He represented that his securities claims were typical of, and identical to, those of the proposed class and that his interests were aligned with the class. No party opposed his motion or attempted to rebut the presumption that he was the most adequate plaintiff.

No party objected to Dr. Thant’s selection of Levi & Korsinsky, LLP as lead counsel. After reviewing the firm’s and attorneys’ resumes, the court found no need to appoint different counsel and was satisfied with Dr. Thant’s selection.

Disposition

The court GRANTED Dr. Thant’s motion. It appointed Dr. Myo Thant as lead plaintiff and Levi & Korsinsky, LLP as lead counsel. It DENIED all other motions to appoint a lead plaintiff and select lead counsel. The court also incorporated into the order the obligations in Dr. Thant’s proposed order.