Stoke Therapeutics (NASDAQ:STOK), Inc., a pharmaceutical company based in Bedford, MA, has reached a settlement over a shareholder derivative lawsuit alleging excessive director compensation and misleading disclosures.
The lawsuit, filed in Delaware Chancery Court on October 26, 2022, by shareholder Gerald J. Alsid, claimed that company directors breached fiduciary duties and were unjustly enriched.
In response to the lawsuit, Stoke Therapeutics made changes to its director compensation policies and filed a supplemental disclosure on May 24, 2023, before its annual shareholder meeting on June 13, 2023. These changes included switching from share-based to dollar-based director compensation targets for 2023 and enhancing disclosures regarding its 2022 peer group.
Although Stoke Therapeutics denies any wrongdoing, the company has agreed to a mootness fee of $175,000 to cover plaintiffs' attorney fees and expenses related to the achieved benefits that rendered some claims moot. The Court approved this arrangement on August 27, 2024, and Stoke Therapeutics will confirm the filing of this report with the Court by September 17, 2024.
Furthermore, a proposed settlement was reached on August 20, 2024, to resolve the remaining claims. The settlement includes the company's commitment to maintain certain director compensation policy changes and a release of related claims without any admission of wrongdoing. The company has also consented to pay up to $415,000 in attorney’s fees and expenses to the plaintiff's counsel, pending Court approval.
The Notice of Pendency and Proposed Settlement of Stockholder Derivative Action, along with the Settlement Hearing and Right to Appear, has been made available as part of the company's recent SEC filing and on its website. The terms of the settlement are subject to Court approval, and, if approved, will lead to the dismissal of all claims in the action.
Stoke Therapeutics trades on the Nasdaq Global Select Market under the ticker symbol NASDAQ:STOK. The information in this article is based on the company's recent SEC filing and is intended to provide shareholders with the necessary details regarding the settlement of the litigation.
In other recent news, Stoke Therapeutics, Inc. presented encouraging data on its investigational drug, zorevunersen, for the treatment of Dravet syndrome at the 15th European Epilepsy Congress.
The data, derived from Phase 1/2a ADMIRAL study and subsequent open-label extension studies, revealed that zorevunersen significantly reduced seizures and improved cognitive and behavioral outcomes within the first year of treatment. These effects seemed to amplify with prolonged use.
Zorevunersen, an antisense oligonucleotide designed to enhance NaV1.1 protein expression, is intended to target the genetic root of Dravet syndrome. The drug has secured orphan drug designation by the FDA and the EMA, and rare pediatric disease designation by the FDA.
The Phase 1/2a studies, including MONARCH and ADMIRAL, along with the SWALLOWTAIL and LONGWING open-label extension studies, showed patients treated with zorevunersen experienced median seizure reductions of 85% at 3 months and 74% at 6 months. In light of these promising results, Stoke Therapeutics plans to progress zorevunersen into a Phase 3 registrational study.
InvestingPro Insights
As Stoke Therapeutics, Inc. navigates through their legal settlements, investors may find the company's financial health and market performance to be of interest. According to InvestingPro data, Stoke Therapeutics has a market capitalization of approximately $834.99 million. The company has experienced significant revenue growth over the last twelve months as of Q2 2024, with an increase of 71.38%. This growth is further underscored by an impressive quarterly revenue growth of 294.72% in Q2 2024. Despite these strong growth figures, it's important to note that the company's operating income margin stands at -755.65%, indicating substantial operating losses relative to its revenue.
InvestingPro Tips suggest that Stoke Therapeutics holds more cash than debt on its balance sheet, which can provide some financial stability. Additionally, analysts have revised their earnings upwards for the upcoming period, reflecting a potentially positive outlook on the company's financial future. However, it's worth mentioning that analysts do not anticipate the company to be profitable this year, and the stock is trading at a high revenue valuation multiple. For investors looking for more detailed analysis and additional tips, there are 9 more InvestingPro Tips available on InvestingPro.
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