iBio Securities Class Action
IBio is a pharmaceutical firm that leverages its iBioLaunch platform – a proprietary technology – to develop and provide pharmaceutical product applications. More specifically, the company uses the platform to create biologics such as vaccines and therapeutic proteins.
Shareholder lawsuit filed
The Rosen Law Firm announced on Oct. 24, 2014, that it had filed a lawsuit against the company that sought to recover damages, under federal securities laws, for all purchasers of iBio’s common stock between Oct. 13, 2014 and Oct. 23, 2014. These dates are inclusive, and represent the class period.
The securities class action claim alleged the pharmaceutical firm provided investors with materially false and misleading statements when they suggested that the producers of the experimental Ebola treatment, ZMapp, would license the patents for the company’s Launch platform, as well as related proprietary technology. The suit claimed that company shares declined once the markets learned the true facts, and this situation damaged the holdings of iBio shareholders.
Before announcing the filing of the shareholder suit, The Rosen Law Firm announced on Oct. 23, 2014, that it was looking into potential fraud claims against the pharmaceutical firm, and preparing a securities class action claim to represent company shareholders. When declaring the inquiry, the law firm listed several key events that served as the basis for the investigation.
First of all, The Rosen Law Firm noted a Washington Post report, which indicated on Oct. 9, 2014, that the manufacturer of ZMapp was looking for more production capacity from Bryan, Texas-based biotechnology company Caliber Biotherapeutics.
Second, iBio released a statement on Oct. 16, 2014, which was titled “iBio Responds to Inquiries About its Role in Emergency Response to Ebola Virus Disease Outbreak.” The pharmaceutical firm released the document based inquiries from the media and shareholders, and confirmed that the pharmaceutical firm is collaborating with Caliber toward commercial opportunities for antibody-related proteins and recombinant antibodies. The participation both entities have in this work is verified by a License and Collaboration Agreement, which is dated Feb. 14, 2013.
The press release also affirmed that iBio’s platform patents, as well as related proprietary technology, can be applied to any new work toward developing and then manufacturing antibodies designed to target the Ebola virus.
US government request
According to the investigation, U.S. officials asked that three labs – including one associated with Texas A&M – submit information on their plans to develop ZMapp. The fact that the government officers had made this request was announced on Oct. 17, 2014, and on the same day, an iBio spokesperson was quoted as stating that a lab would have to obtain a license from the pharmaceutical firm if it wanted to use plant-based technology to make ZMapp vaccine.
Reports appeared online on Oct. 20 and 23, 2014, making it known that Genetics AG had developed its own method to manufacture ZMapp with the use of plant-based technology and did not require a license from iBio. In these writings, A&M lab’s head effectively stated that alternative methods – such as that of iBio – would not work, since only the process A&M had already tested on animals would work.
Finally, the reports revealed that while Caliber and iBio had a relationship, their collaboration had nothing to do with an Ebola drug. According to the investigation, iBio stock dropped from $3.12 to $1.59 – a decline of more than 50 percent – as a result of these adverse disclosures. This depreciation hurt investor holdings.