A securities class action suit was filed against a biopharmaceutical company that acquires, develops and markets cancer treatments in the U.S. and other markets following allegations that the firm and some of its executives violated federal securities laws.
The lawsuit against Clovis Oncology Inc. was filed in the U.S. District Court for the District of Colorado on behalf of investors who purchased shares in the company during the class period between Oct. 31, 2013 and Nov. 15, 2015, according to a press release. The class action suit claims that the biopharmaceutical firm and certain officers breached the Securities Exchange Act of 1934. Clovis’ cancer treatments are commercialized in the U.S., Europe and other international markets. Companion diagnostics and personalized medications are developed by the company to treat specific subsets of cancer. The biopharmaceutical firm has three products in development: rociletinib (CO-1686), for the treatment of non-small cell lung cancer; rucaparib, for the treatment of ovarian cancer and lucitanib, which was developed to treat breast and lung cancer.
The unconfirmed nature of responses for a Clovis cancer treatment led to questions about its commercial viability.Clovis cancer treatment’s data sets were allegedly based on unconfirmed responses
The class action filing alleges that Clovis and some of its executives made false and/or misleading statements and/or failed to disclose certain facts about its business, operations and prospects. The lawsuit claims that the defendants’ new drug application to the Food and Drug Administration for rociletinib contained immature data sets on unsubstantiated tumor reduction rates and confirmed response rates. It goes on to allege that the biopharmaceutical company’s breakthrough therapy designation submission included immature data sets based, for the most part, on unconfirmed responses. Clovis then allegedly presented interim data publicly and at medical meetings that contained a data set primarily based on unconfirmed responses.
While the efficacy data was maturing the number of unconfirmed responses that transitioned to confirmed responses was lower than expected, the class action filing claimed. Due to this, Clovis’ NDA faced a probable delay or rejection by the FDA. As a result of this the defendants’ statements regarding the biopharmaceutical company’s operations, business and prospects were deemed by the class action suit to be false and misleading, and/or lacked reasonable basis.
“The FDA asked for information on the efficacy of rociletinib.”
FDA’s questions about rociletinib’s efficacy drive share prices down
On Nov. 16, 2015, Clovis announced that the FDA had asked for additional information on the efficacy of rociletinib. The agency was looking for analysis of both the twice daily 500 mg and 625 mg doses for the cancer treatment’s patient groups. The request was likely to set back the cancer treatment’s approval process and call into question its commercial viability. On this news, Clovis’ shares plummeted 70 percent, from $69.19 per share to close at $30.24 per share on Nov. 16. This development wiped away nearly $2 billion in market capitalization.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or info@battea.com.