A Maryland man has filed a complaint against a California biopharmaceutical company for allegedly misleading shareholders about its earning potentials and products.
Lawyers representing plaintiff Harvey Weisman filed a verified shareholder derivative complaint against Arrowhead Research Corporation in U.S. District Court for the Central District of California on Thursday, claiming the company made false statements about its operations and financial prospects.
Based in Pasadena, California, Arrowhead develops RNA Interference (RNAi) therapeutics. RNAi is Nobel Prize-winning discovery that allows mechanism in living cells to inhibit specific genes. Arrowhead develops drugs that target the RNAi mechanism to suppress disease-causing genes.
At the center of the class-action complaint is the company’s ARC-520, an RNAi therapeutic that targets the hepatitis B virus. Arrowhead announced the completion of its first phase of study (testing the drug on non-human primates, mice and rats) on Oct. 8, 2013, and the commencement of a second phase (testing the drug on humans) on March 24.
The complaint claims that during an earnings teleconference on Aug. 12, Arrowhead CEO Christopher Anzalone and COO Bruce Given failed to disclose the true effectiveness of ARC-520 on humans.
When the company officially announced the final results of the second phase on Oct. 8, the reduction level in humans was far short of the suggestions made during the teleconference. That caused the company’s stock to fall nearly 44 percent, or $5.48 per share, from its previous closing price.
Because of that decline in the market value of the company’s securities, the complaint claims Weisman and other class-action members suffered significant losses and damages.
The complaint seeks restitution, as well as all fees related to the case and any other award the court sees fit.
Attorneys Robert S. Green, James Robert Noblin and Lesley E. Weaver of Green & Noblin, P.C. filed case number 2:14-cv-08982-JAK-FFM.
This is a report on a civil lawsuit filed at the U.S. District Court for the Central District of California. The details in this report come from an original complaint filed by a plaintiff. Please note that a complaint represents an accusation by a private individual, not the government. It is not an indication of guilt, and it represents only one side of the story.