Shares in biotech firm Sirtex Medical are in a trading halt as the company faces potential legal action over trading updates that allegedly misled investors.
The liver cancer treatment developer has received a letter from a law firm foreshadowing legal proceedings for alleged breaches of Sirtex's disclosure obligations, and misleading and deceptive conduct.
The proposed legal action is linked to Sirtex's statement in August that it would achieve double digit dose sales growth in the 2016/17 financial year, a forecast it downgraded in December.
"The board is considering the foreshadowed claim, and taking legal advice, but considers that the claim is material to the company," Sirtex said in a statement.
Sirtex shares plunged 37 per cent on December 9 when the company lowered its expectations for half year and full year sales growth, and warned full year earnings were anticipated to decline 12 per cent.
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The company fired its chief executive Gilman Wong on January 13 after an investigation into his sale of Sirtex shares in October, several days after the company's original sales forecasts were reaffirmed at its annual general meeting.
The findings of the investigation have not been publicly released.
Sirtex shares last traded at $14.38, down from the $25.49 they were valued at prior to the company's December trading update.
