A securities class action suit was filed against a pharmaceutical company and some of its officers following claims they violated federal securities laws.
The lawsuit against Lipocine Inc. was filed in the District Court for the District of New Jersey on behalf of investors who purchased shares in the firm during the class period from June 30, 2015 to June 28, 2016, according to a press release. The company focuses on developing pharmaceutical products for its proprietary drug delivery components. Lipocine’s lead product candidate is LPCN 1021, or TLANDO, a testosterone replacement therapy. It delivered positive top-line efficacy outcomes during Phase 3 testing.
Lawsuit alleges Lipocine failed to disclose NDA problems
The class action complaint alleged through the class period the defendants made materially false and misleading statements. In addition, the lawsuit claimed Lipocine and certain executives omitted materially adverse facts regarding the company’s operations, business and prospects. The securities class action lawsuit alleged the defendants hid from investors the fact that its filing of a New Drug Application for LPCN 1021 to the U.S. Food and Drug Administration included mistakes.
“The NDA for LPCN 1021 included mistakes.”
Due to these claims, the lawsuit alleged the defendants’ statements on its business and operations through the class period were false and misleading and/or lacked a reasonable basis. As a result of the questions on the veracity of the defendants’ public disclosures, the lawsuit alleged Lipocine’s stock traded at artificially inflated levels.
FDA points out issues with LPCN 1021 NDA
The lawsuit claimed that on June 29, Lipocine disclosed its receipt of a Complete Response Letter from the FDA in regard to its NDA for LPCN 1021. The CRL noted there were issues with the company’s NDA. Specifically, the FDA pointed out deficiencies with the dosing algorithm on the label. The proposed titration scheme for clinical practice was substantially altered from the one used during the Phase 3 trial. This led to dissonance between the trial dosing algorithm and the one intended for real-world clinical practice.
On this news, Lipocine stock plunged more than 50 percent. The company’s securities closed at $3.10 per share on June 29, 2016.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or info@battea.com.