Tokai is a biopharmaceutical company focused on developing and commercializing innovative therapies for prostate cancer and other hormonally-driven diseases. The Company's lead drug candidate is galeterone, an oral small molecule that was, at all relevant times, in various clinical trials for the treatment of patients with metastatic castration-resistant prostate cancer.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) there were significant structural problems with the trial design for Tokai's pivotal Phase 3 galeterone study, ARMOR3-SV; (ii) consequently, ARMOR3-SV was unlikely to succeed in meeting its primary endpoint; (iii) as a result, commercialization of galeterone was less likely and/or imminent than Tokai had led investors to believe; and (iv) as a result of the foregoing, the Company's financial statements, as well as Defendants' statements about Tokai's business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.
On November 2, 2015, Richard Pearson published an article on the investment website Seeking Alpha, entitled "What's Wrong With Tokai Pharmaceuticals?" (the "Pearson Report"). The Pearson Report described structural problems with the design of the Company's ARMOR3-SV trial.
On this news, Tokai's share price fell $0.07, or 0.63%, to close at $10.98 on November 2, 2015.
On July 26, 2016, Tokai announced plans "to discontinue the ARMOR3-SV clinical trial, our pivotal Phase 3 study" of galeterone.
On this news, Tokai's share price plummeted by $4.10, or nearly 79%, to close at $1.10 on July 26, 2016.
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SOURCE Pomerantz LLP