Calgary-based Synsorb Biotech Inc. and three of its officers have been slapped with a lawsuit in the U.S.
The suit was filed in a New York district court and seeks class-action certification. It alleges violations of U.S. federal securities during the period April 2 to Dec. 10, 2001, in connection with disclosures regarding Synsorb’s business.
Synsorb president and CEO David Cox said last week that the matter was in the hands of company lawyers, who had advised him not to say anything.
However, he added: “I am quite satisfied that the public disclosures Synsorb made . . . were appropriate and timely.”
On Dec. 10, Synsorb announced it was terminating development of its lead product, anti-diarrhea drug SYNSORB Cd after disappointing trials, and examining strategic alternatives for enhancing shareholder value.
Meanwhile, the company announced last week that it had entered into an agreement with Canaccord Capital Corporation as underwriters to sell 1,530,800 Common Shares of Oncolytics Biotech Inc. at a price of $3.75 per common share for gross proceeds of $5,740,000.
“This transaction provides SYNSORB with adequate cash reserves to deal with existing debt, and increases our flexibility to pursue strategic opportunities on a timely basis,” said Bill Hogg, vice-president, finance and chief financial officer.
Upon completion of the transaction, SYNSORB will hold 4,750,000 escrowed shares of Calgary-based Oncolytics.
