The complaint charges Stemline and certain of its officers and/or directors with violations of the Securities Exchange Act of 1934. Stemline is a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing oncology therapeutics. The Company is developing several clinical stage product candidates, including SL-401, a targeted therapy directed to the interleukin-3 receptor present on a range of hematologic cancers.
The complaint alleges that throughout the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding the prospects for Stemline's SL-401 drug candidate, including that a cancer patient in a Stemline clinical trial for SL-401 had died from a severe side effect on January 18, 2017. As a result of defendants' false statements and/or omissions, Stemline's stock traded at artificially inflated prices during the Class Period, reaching a high of $13.95 per share on January 10, 2017.
On January 19, 2017, Stemline issued a press release announcing a proposed follow-on public offering of the Company's common stock. Subsequently, on January 20, 2017, Stemline announced the pricing of the offering of 4.5 million shares of the Company's common stock at $10.00 per share, with projected gross proceeds of $45 million to Stemline.
Then, on February 2, 2017, before the market opened, Adam Feuerstein published an article on TheStreet reporting that on January 18, 2017, a cancer patient in a clinical trial of SL-401 for the treatment of blastic plasmacytoid dendritic cell neoplasm ("BPDCN") had died from a severe side effect tied to the drug. The article stated that on January 17, 2017, the patient had been diagnosed with capillary leak syndrome and had died the next day, "having received only two of the scheduled five doses of SL-401 of the initial treatment cycle." Subsequently on February 2, 2017, the Company issued a press release that provided an update on its ongoing trial for the treatment of BPDCN utilizing SL-401, confirming that BPDCN "has no approved treatment." The Company admitted receiving the report regarding the patient death on January 18, 2017, but continued with its stock offering on January 19, 2017, without disclosing the patient death to investors. As a result of this news, the price of Stemline stock dropped $4.15 per share, to close at $5.60 per share on February 2, 2017, a decline of 42% on volume of nearly 3.7 million shares traded.
Plaintiff seeks to recover damages on behalf of all purchasers of Stemline publicly traded securities during the Class Period (the "Class"). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is widely recognized as one of the leading law firms advising U.S. and international institutional investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history and was ranked first in both total amount recovered for investors and number of securities class action recoveries in ISS's SCAS Top 50 Report for the last two years. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm's clients. Robbins Geller not only secures recoveries for defrauded investors, it also strives to implement corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit rgrdlaw.com/cases/stemline/ for more information.
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SOURCE Robbins Geller Rudman & Dowd LLP