AcelRx Pharmaceuticals Securities Class Action
A law firm recently announced that it had filed a securities class action lawsuit against AcelRx Pharmaceuticals, Inc.
The suit was brought forth after the law firm – Law Offices of Howard G. Smith – announced on Sept. 29, 2014, that it was looking into potential legal violations on the behalf of investors who bought the company’s securities.
AcelRx background
AcelRx is a specialty pharmaceutical firm that focuses on creating treatments for acute and breakthrough pain. The company’s founders originally created AcelRx in an attempt to address the problems associated with post-operative intravenous patient-controlled analgesia.
The specialty pharmaceutical firm currently intends to commercialize product candidates in the U.S., and then target foreign markets by licensing the right to develop and commercialize these treatments to other firms. One of the company’s products, Zalviso, is mentioned in the class action lawsuit.
Lawsuit basics
The Law Offices of Howard G. Smith announced on Oct. 4, 2014, that it had filed the lawsuit to represent investors who obtained common stock and/or call options of the company, or alternatively sold put options on the firm’s securities, between Dec. 2, 2013 and Sept. 25, 2014. These dates are inclusive, and represent the class period.
The legal claim, which was filed in the United States District Court for the Northern District of California, alleged that during the class period, the defendants made statements that were false and or misleading, and also failed to disclose important matters.
For one thing, the complaint claimed the company did not reveal it had not provided the FDA with adequate data that would support the product’s shelf life. In addition, the suit alleged the firm failed to disclose Zalviso’s Instructions for Use failed to sufficiently address the risk of tablets being accidentally lost.
Finally, the class action lawsuit claimed that because of the aforementioned statements and failures to disclose key information, the statements defendants made about Zalviso lacked a reasonable basis and or were materially false and misleading. The suit alleged that the drug’s regulatory approval and financial prospects also suffered from this form of inaccuracy.
AcelRx Pharmaceuticals Securities Class Action
FDA responds to AcelRx new drug application
The company announced on July 25, 2014, that its New Drug Application for Zalviso had resulted in the Food and Drug Administration sending a Complete Response Letter. At the time, the specialty pharmaceutical firm stated the FDA wanted more information on the Zalviso System, including further information regarding the product’s shelf life and the latest updates to the device’s Instructions for Use.
Shortly after, AcelRx shares fell $4.44, or almost 41 percent, to close at $6.39 apiece on July 28, 2014. This sharp decline happened amid unusually strong transaction volume.
On July 28, 2014, the company stated that it intended to resubmit the new application for the drug by the end of the year.
However, on Sept. 26, the specialty pharmaceutical firm updated this plan to send in the New Drug Application (NDA), saying that the process for doing so would be completed no earlier than the first quarter of 2015. In addition, AcelRx provided more news from the FDA, indicating that the government agency would consider the resubmission a Class 2 resubmission, and would therefore have a review period of six months.
Markets responded to this news by causing shares of the company to drop $1.31, or more than 19 percent, to close at $5.41 each on Sept. 26, 2014, amid particularly high trading volume.