TPTX » Topics » 15. Contingencies

These excerpts taken from the TPTX 10-K filed Mar 31, 2008.

15. Contingencies

        Several lawsuits were filed against us in February 2005 in the U.S. District Court for the Southern District of New York asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act and Rule 10b-5 thereunder on behalf of a class of purchasers of Axonyx common stock during the period from June 26, 2003, through and including February 4, 2005, referred to as the class period. Dr. Marvin S. Hausman, M.D., a former director and our former Chief Executive Officer, and Dr. Gosse B. Bruinsma, M.D., also a former director and a former Chief Executive Officer, were also named as defendants in the lawsuits. These actions were consolidated into a single class action lawsuit in January 2006. On April 10, 2006, the class action plaintiffs filed an amended consolidated complaint. We filed our answer to that complaint on May 26, 2006. Our motion to dismiss the consolidated amended complaint was filed on May 26, 2006 and was submitted to the court for a decision in September 2006. The motion to dismiss is pending.

        The class action plaintiffs allege generally that our Phase III phenserine development program was subject to alleged errors of design and execution which resulted in the failure of the first Phase III phenserine trial to show efficacy. Plaintiffs allege the defendants' failure to disclose the alleged defects resulted in the artificial inflation of the price of our shares during the class period.

        There is also a shareholder derivative suit pending in New York Supreme Court, New York County, against a current director, former directors and former officers. The named defendants are Marvin S. Hausman, M.D., Gosse B. Bruinsma, M.D., S. Colin Neill, Louis G. Cornacchia, Steven H. Ferris, Ph.D., Gerard J. Vlak, Ralph Snyderman, M.D. and Michael A. Griffith. Defendants are alleged to have breached their duties to us and misused inside information regarding clinical trials of phenserine. This action has been stayed pending further developments in the federal class action.

        The complaints seek unspecified damages. Management believes the claims are without merit and plans to defend the claims vigorously. We have determined that a loss in connection with these matters is possible, but not probable. Accordingly, we have not recorded any liability relating to these matters.

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TABLE OF CONTENTS
PART I Forward-Looking Statements
PART II
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among TorreyPines Therapeutics, Inc, (known as Axonyx Inc. prior to 10/3/06) The NASDAQ Composite Index And The NASDAQ Biotechnology Index
PART III
PART IV
SIGNATURES
TorreyPines Therapeutics, Inc. Index to Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TorreyPines Therapeutics, Inc. Consolidated Balance Sheets (in thousands, except share and per share data)
TorreyPines Therapeutics, Inc. Consolidated Statements of Operations (in thousands, except share and per share data)
TorreyPines Therapeutics, Inc. Consolidated Statements of Stockholders' Equity (Deficit) (in thousands, except share and per share data)
TorreyPines Therapeutics, Inc. Consolidated Statements of Cash Flows (in thousands)
TorreyPines Therapeutics, Inc. Notes to Consolidated Financial Statements December 31, 2007

15. Contingencies



        Several lawsuits were filed against us in February 2005 in the U.S. District Court for the Southern District of New York asserting claims under
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act and Rule 10b-5 thereunder on behalf of a class of purchasers of Axonyx common
stock during the period from June 26, 2003, through and including February 4, 2005, referred to as the class period. Dr. Marvin S. Hausman, M.D., a former director and our former
Chief Executive Officer, and Dr. Gosse B. Bruinsma, M.D., also a former director and a former Chief Executive Officer, were also named as defendants in the lawsuits. These actions were
consolidated into a single class action lawsuit in January 2006. On April 10, 2006, the class action plaintiffs filed an amended consolidated complaint. We filed our answer to that complaint on
May 26,
2006. Our motion to dismiss the consolidated amended complaint was filed on May 26, 2006 and was submitted to the court for a decision in September 2006. The motion to dismiss is pending.



        The
class action plaintiffs allege generally that our Phase III phenserine development program was subject to alleged errors of design and execution which resulted in the failure
of the first Phase III phenserine trial to show efficacy. Plaintiffs allege the defendants' failure to disclose the alleged defects resulted in the artificial inflation of the price of our
shares during the class period.



        There
is also a shareholder derivative suit pending in New York Supreme Court, New York County, against a current director, former directors and former officers. The named defendants are
Marvin S. Hausman, M.D., Gosse B. Bruinsma, M.D., S. Colin Neill, Louis G. Cornacchia, Steven H. Ferris, Ph.D., Gerard J. Vlak, Ralph Snyderman, M.D. and Michael A. Griffith. Defendants are alleged to
have breached their duties to us and misused inside information regarding clinical trials of phenserine. This action has been stayed pending further developments in the federal class action.



        The
complaints seek unspecified damages. Management believes the claims are without merit and plans to defend the claims vigorously. We have determined that a loss in connection with
these matters is possible, but not probable. Accordingly, we have not recorded any liability relating to these matters.



F-27











QuickLinks


TABLE OF CONTENTS


PART I Forward-Looking Statements







PART II


COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among TorreyPines Therapeutics, Inc, (known as Axonyx Inc. prior to 10/3/06) The NASDAQ Composite Index And The NASDAQ Biotechnology Index








PART III


PART IV



SIGNATURES


TorreyPines Therapeutics, Inc. Index to Consolidated Financial Statements


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



TorreyPines Therapeutics, Inc. Consolidated Balance Sheets (in thousands, except share and per share data)


TorreyPines Therapeutics, Inc. Consolidated Statements of Operations (in thousands, except share and per share data)


TorreyPines Therapeutics, Inc. Consolidated Statements of Stockholders' Equity (Deficit) (in thousands, except share and per share data)


TorreyPines Therapeutics, Inc. Consolidated Statements of Cash Flows (in thousands)


TorreyPines Therapeutics, Inc. Notes to Consolidated Financial Statements December 31, 2007








EX-21.1
2
a2183919zex-21_1.htm
EXHIBIT 21.1







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EXHIBIT 21.1



This excerpt taken from the TPTX 10-K filed Mar 29, 2007.

15.   Contingencies

Several lawsuits were filed against us in February 2005 in the U.S. District Court for the Southern District of New York asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act and Rule 10b-5 thereunder on behalf of a class of purchasers of Axonyx common stock during the period from June 26, 2003, through and including February 4, 2005, referred to as the class period. Dr. Marvin S. Hausman, M.D., a current director and our former Chief Executive Officer, and Dr. Gosse B. Bruinsma, M.D., also a former Chief Executive Officer, were also named as defendants in the lawsuits. These actions were consolidated into a single class action lawsuit in January 2006. On April 10, 2006, the class action plaintiffs filed an amended consolidated complaint. The Company filed its answer to that complaint on May 26, 2006. The Company’s motion to dismiss the consolidated amended complaint was filed on May 26, 2006 and was submitted to the court for a decision in September 2006. The motion to dismiss is pending.

The class action plaintiffs allege generally that the Company’s Phase III phenserine development program was subject to alleged errors of design and execution which resulted in the failure of the first Phase III phenserine trial to show efficacy. Plaintiffs allege the defendants’ failure to disclose the alleged defects resulted in the artificial inflation of the price of the Company’s shares during the class period.

F-29




TorreyPines Therapeutics, Inc.
Notes to Consolidated Financial Statements (Continued)
December 31, 2006

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