Sarah A. Sullivan and Alexander Lee Callo, both of Saul Ewing in Newark, have recently entered appearances on behalf of an artificial intelligence-driven pharma-tech company sued in a pending securities class action.
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Exscientia, a pharma-tech company that uses AI in the design and development of differentiated medicines for diseases, was hit with a federal securities class action claim in April when stock prices fell after it allegedly failed to disclose that it fired its leader, Andrew Hopkins, for allegedly engaging in improper relationships with employees.
The plaintiff, Orindo Dorin, filed the complaint April 26 in the U.S. District Court for the District of New Jersey, alleging that the defendants, Exscientia, Hopkins and the former chairman of the company’s board of directors, David Nicholson, made false and misleading statements.
Since the initial filing of the case, counsel for Dorin, Thomas H. Przybylowski of Pomerantz in New York, filed a motion June 26 to consolidate the case with an existing class action complaint also filed in the New Jersey federal court against Exscientia by Frank Campanile. Chief U.S. District Judge Renee Marie Bumb will hear the motion as well as Campanile’s motion to appoint himself as the lead plaintiff and to name the Rosen Law Firm as his counsel Aug. 5, according to court records.
Exscientia is a U.K.-based company that trades on the Nasdaq under the ticker symbol “EXAI.” According to its website, the company’s mission is to find faster and smarter ways to discover new and better drugs by actively applying AI to precision-engineered medicines. In a news release issued on Feb. 13, the company announced that its board of directors terminated Hopkins for cause, effective immediately. The release also revealed that the decision to terminate stemmed from an investigation that revealed Hopkins “engaged in relationships with two employees that the board determined were inappropriate and inconsistent with the company’s standards and values,” the opinion said.
The company’s stock price dropped $1.72 per share on the release of that news to close down 22.9%, at $5.79 per share on Feb. 13. Exscientia’s statement also acknowledged that Nicholson had prior knowledge of earlier relationships and handled the matter through outside counsel rather than by consulting with the board.
Both complaints include identical claims and allege violations of Section 10(b) of the Exchange Act and Rule 10(b)-5 against the company and the individual defendants, and Rule 20(a) against the individual defendants. As for the first count, the complaints allege that the defendants “knowingly or recklessly, directly or indirectly,” violated Section 10(b) and Rule 10(b)-5. The second count alleges that the individual defendants were “controlling persons” under the meaning of §20(a) of the Exchange Act and that in that capacity, “they participated in the unlawful conduct alleged which artificially inflated the market price of Exscientia securities.”
The proposed class members include those who purchased or acquired Exscientia stock between March 23, 2022, and Feb. 12, 2024, according to the complaint. The relief sought by Dorin included class certification with Dorin as the class representative, damages, prejudgment and postjudgment interest, and attorney fees and costs.
Oliver Stohlmann, an Exscientia spokesperson, previously told the Law Journal that the company “holds our executives and employees accountable for adhering to the highest moral and ethical standards globally,” and that it was assessing the allegations against it.
A message seeking comment from Saul Ewing counsel was not immediately returned.
