A securities class action in Newark federal court claims Enzymotec, an Israeli biotech company that made a $63.5 million initial public offering in 2013, failed to disclose problems with its infant formula business in China.
Enzymotec’s filings with the U.S. Securities and Exchange Commission and its disclosures to investors described the rapid sales growth of its InFat line of formula in China and elsewhere in Asia, but failed to fully disclose material facts about that business, the suit claims. Enzymotec, which is listed on the Nasdaq market, failed to disclose to investors that Chinese regulations required it to make certain changes in its production line, and that the Chinese baby formula business was subjected to increased volatility and decreased revenue. Enzymotec also failed to notify investors that it was facing legal action over its alleged breach of an agreement with AarhusKarlshamn AB, a Swedish company that is its partner in selling InFat products, the suit says.
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