A law firm recently announced it has filed a class action lawsuit against a biotechnology company in an attempt to recover damages for alleged violations of federal securities laws.
The securities class action claim was filed against Puma Biotechnology Inc. in the United States District Court, Central District of California, on behalf of all investors who purchased shares in the company during the class period between July 23, 2014 and May 13, 2015. The class action alleges that the defendants violated the Securities Exchange Act of 1934 by making false and/or misleading statements, and failed to disclose material adverse facts about Puma’s prospects, operations, business and performance.
A drug developed to apply to certain forms of breast cancer did not perform as expected, leading to substantial damages for investors.Company statements on drug trials misled investors
Puma is a biopharmaceutical firm focused on acquiring and developing novel therapeutics for treating cancer. The company’s lead product candidate is an investigational drug called PB272, or neratinib. Puma has described the drug as “an extended adjuvant treatment of human epidermal growth factor receptor 2 (‘HER2’)-positive metastatic breast cancer,” according to a press release. However, the company allegedly made a number of false and/or misleading statements regarding trials of this drug. Specifically, the comments in question were in regard to what sort of breast cancer PB272 would treat and how Phase III of the ExteNET trial was playing out.
The class action claim alleges that the company failed to disclose that its New Drug Application filing would be for a positive early stage breast cancer indication, rather than metastatic breast cancer as previously indicated. Also, according to the securities suit class action, the company didn’t inform investors that it would need additional safety information it did not have for its NDA filing and that the studies required to get that data would push back the filing, in addition to overstating the results of Phase III of the ExteNET trial.
Share prices tumble twice during class period
On Dec. 2, 2014, the company announced that it would be pushing its NDA filing back from a previously announced deadline of early 2015 to the first quarter of 2016. This because Puma needed additional safety information after secretly switching PB272 to apply for extended adjuvant HER2-positive early stage breast cancer, “shocking the market,” according to the law firm’s release. On this news, shares in the biotechnology company dropped $27.33 per share, or over 12 percent, to close at $197.67 per share on Dec. 3, 2014 on extremely high volume.
“The company didn’t inform investors that it needed additional safety information.”
Then on May 13, 2015, the company released four abstracts on the PB272 breast cancer drug that were presented at the American Society of Clinical Oncology annual meeting. In July of the previous year, the company had stated that PB272 performed 33 percent better than the placebo. However, in the abstracts released in May, Puma noted the difference to be merely 2.3 percent.
Following the revelation of the true trial results, the price of shares in the company fell once again. This time, by $39.05 per share, or more than 18.6 percent, to close at $170.67 per share on May 14, 2015, on unusually high volume.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or info@battea.com.