The lawsuit focuses on whether the Company and its executives violated federal securities laws by failing to disclose there were significant structural problems with the trial design for Tokai Pharmaceuticals' pivotal Phase 3 galeterone study, ARMOR3-SV.
Specifically, 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. Then on July 26, 2016, Tokai announced plans "to discontinue the ARMOR3-SV clinical trial, our pivotal Phase 3 study" of galeterone stating that ARMOR3-SV was unlikely to succeed in meeting its primary endpoint.
On this news, Tokai's share price fell from $5.20 per share on July 25, 2016 to a closing price of $1.10 on July 26, 2016 —a $4.10 or a 78.85% drop.
Finally, after market hours on July 29, 2016, Tokai issued a press release announcing that it would reduce its workforce by approximately 60 percent by the end of the third quarter of 2016.
On this news, Tokai's share price fell from $1.26 per share on July 29, 2016 to a closing price of $1.13 on August 1, 2016 —a $0.13 or a 10.32% drop.
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If you invested in Tokai stock or options between June 24, 2015 and July 25, 2016 and would like to discuss your legal rights, visit www.faruqilaw.com/TKAI. You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to firstname.lastname@example.org. Faruqi & Faruqi, LLP also encourages anyone with information regarding Tokai's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class that is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
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