The medical device and pharma company Innocoll Holdings was recently hit with a securities class action suit stemming from allegations that one of its filings with the U.S. Food and Drug Administration was not complete, and would not be approved. To learn more about this case, visit Battea’s Innocoll Holdings case summary.
Specifically, the class action lawsuit states that the company submitted a notice of availability (NOA) to the FDA in October 2016 for a post-surgical pain treatment known as Xaracoll. However, the filing was incomplete and was not likely to be accepted by the FDA in 2017, which was what the company initially told investors. As a consequence, the company’s stock took a significant hit when the FDA formally refused to accept the filing.
The suit has a class period from Nov. 3, 2016, to Dec. 29, 2016.
A closer look at the situation
Indeed, the Ireland-based company received word from the federal agency just before the end of 2016 that the FDA could not formally review Xaracoll’s application because it was incomplete, Innocoll said. The FDA specifically noted that Xaracoll had not been properly listed as a combination of drug and medical device, which requires more information to be submitted. As such, the company asked for a meeting with the FDA to deal with these issues and seek clarification about what kinds of additional information the agency needs to push the treatment through the approval process in a timely fashion. The hope is to get the treatment approved as soon as possible and get back on track with what the company originally projected.
“We expect to work with the FDA over the coming weeks in an effort to address the open issues and to define a path forward for a successful re-filing of our application at the earliest point in time,” said Tony Zook, CEO of Innocoll.
How stock prices moved before and after
Innocoll’s stock price had a 2016 high back in mid-June, when its stock reached about $11.50 per share. Since then, however, it fell sharply throughout that month and settled into the range of between $5 and $6 per share for most of the rest of the year, down somewhat from the typical range seen in the first few months of 2016.
By the time the class period opened in early November of that year, though, the stock price had fallen again, this time to about $3.50 per share. It further declined for the next several weeks, and on Dec. 29 – the day the class period closed – the stock stood at just $1.77. Then, since the start of the new year, the stock has been hovering well below $1 per share, reaching as low as $0.58 in early February. Currently, Innocoll’s stock price stands at about $0.69 per share.