Alcobra Securities Class Action
A securities class action claim was recently brought forth against Alcobra Ltd.
Alcobra is a biopharmaceutical firm based in Tel Aviv, Israel. The company is currently focused on developing and commercializing a new proprietary treatment named MDX for Attention Deficit Hyperactivity Disorder, as well as other cognitive disorders.
On Nov. 25, 2014, The Rosen Law Firm announced the filing of a shareholder lawsuit that was brought forth to present purchasers of Alcobra’s common stock between March 28, 2014, and Nov. 14, 2014.
Securities class action claims
The legal claim brought forth by The Rosen Law Firm involved allegations the company misrepresented or concealed key information, and that as a result of these misleading statements, company shares moved lower, hurting the holdings of investors.
A separate suit filed by Glancy Binkow & Goldberg LLP, which was announced on Nov. 19, 2014, made similar allegations, and provided additional detail on the claims made against the defendant. This particular legal action was brought forth in the U.S. District Court for the Southern District of New York.
The Glancy Binkow lawsuit alleged the company made false and or misleading statements about, and failed to disclose material adverse facts surrounding, its financial prospects and operations. The legal action claimed the company misrepresented and or neglected to reveal that:
The company used post hoc analysis for MDX that did not follow original protocols, and as a result of this and other actions, Alcobra presented its analysis inconsistently.
Until the point the biopharmaceutical firm removed patients from its analysis of the Phase III study, the treatment for ADHD and other cognitive problems showed no statistical benefit when compared to the placebo.
As a result of the aforementioned, the company’s statements about its operations, business and prospects, including communications regarding the clinical results of MDX, either lacked a reasonable basis or were false and misleading.
Clinical results
Alcobra announced on Oct. 6, 2014, that its flagship product had shown a statistically significant improvement in ADHD symptoms during the company’s Phase III study on adult ADHD.
On Oct. 23, 2014, the biopharmaceutical firm supplied new information, indicating that the Phase III trial was unable to yield statistically significant improvement in the symptoms experienced by patients.
“While a complete ITT analysis by ADHD subtypes is still ongoing … the magnitude of symptom improvement appears to be similar in all subtypes, and the Predominantly-Inattentive ADHD (PI-ADHD) subtype alone did not produce a statistically significant outcome,” according to a Alcobra statement quoted by Glancy Binkow.
Second Phase III study announced
On Nov. 17, 2014, when releasing its third quarter financial results, the company announced plans to meet with the U.S. Food and Drug Administration and hold a second adult Phase III study in 2015.
The company announced at the time that it was “currently evaluating changes to the design and monitoring of the second trial to control the unusually high placebo response and wide response variability observed in the first Phase III study,” according to a statement quoted by Glancy Binkow.
That day, company shares dropped 6 percent, or $0.21. On Nov. 18, these securities fell another 6 percent, closing at $3.24 each. This decline coincided with significant transaction volume.
The Rosen Law Firm notified eligible investors that if they want to serve as lead plaintiff, they have until Jan. 19, 2015, to move the court. Alternatively, Glancy Binkow revealed that class members interested in serving as lead plaintiff in the securities class action claim have until 60 days following the release of the law firm’s notice on Nov. 19, 2014, to move the court.