LOS ANGELES (Legal Newsline) - A verified shareholder derivative complaint recently filed against Arrowhead Research Corporation in U.S. District Court for the Central District of California claims the biopharmaceutical company made false of statements about its operations and financial prospects.
Based in Pasadena, Calif., Arrowhead develops RNA Interference (RNAi) therapeutics. RNAi is Nobel Prize-winning discovery that allows mechanisms 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 Nov. 20 class action lawsuit – filed on behalf of plaintiff Harvey Weisman – 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, which tested the drug on non-human primates, mice and rats, on Oct. 8, 2013. It began a second phase of human testing on March 24.
The lawsuit claims that during an earnings teleconference on Aug. 12, Arrowhead CEO Christopher Anzalone and COO Bruce Given allegedly 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 allegedly far short of the suggestions made during the teleconference. That caused the company’s stock to fall approximately 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 lawsuit claims Weisman and other class members suffered significant losses and damages.
Attorneys Robert S. Green, James Robert Noblin and Lesley E. Weaver of Green & Noblin are representing the plaintiff.
U.S. District Court for the Central District of California case number 2:14-cv-08982.