SAN DIEGO and NEW YORK, May 10, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP announce that a shareholder of Delcath Systems, Inc. (NASDAQ: DCTH) filed a federal securities fraud class action complaint on May 8, 2013, in the U.S. District Court for the Southern District of New York. The complaint alleges that Delcath and certain of its officers and directors violated the Securities Exchange Act of 1934 between April 21, 2010 and May 2, 2013 (the "Class Period"). Delcath operates as a specialty pharmaceutical and medical device company focusing on the field of oncology. The company's technology enables the administration of high-dose chemotherapy and other therapeutic agents to diseased organs or regions of the body. The allegations in question concern a drug-device combination product, the Melblez Kit, which is designed to administer concentrated regional chemotherapy for patients suffering from unresectable ocular melanoma metastatic to the liver.
Delcath Accused of Making False and Misleading Statements Concerning the Company's Business, Operations, and Prospects
According to the complaint, certain officers and directors at Delcath made materially false and misleading statements during the Class Period and failed to disclose material adverse facts about Delcath's business, operations, and prospects. Specifically, the complaint alleges that Delcath submitted a New Drug Application ("NDA") to the U.S. Food & Drug Administration ("FDA") for the Melblez Kit which failed to disclose severe toxicity and deaths associated with the drug's adverse reactions. Further, Delcath failed to disclose that the company's manufacturing facilities were in violation of the FDA's Current Good Manufacturing Practices.
The Truth Is Revealed and Delcath's Stock Price Drops
On February 22, 2011, Delcath disclosed that it received a "refusal to file" letter from the FDA for its NDA. The letter "requested information involving manufacturing plant inspection timing, product and sterilization validations and additional safety information ... as well as additional statistical analysis clarification." On this news, Delcath's share price dropped $4.29—or 38%—to close at $7.01 per share on February 22, 2011.
On April 30, 2013, the FDA published briefing documents ahead of a meeting by its Oncologic Drugs Advisory Committee ("ODAC"). The documents stated that the evidence of the Melblez Kit's effectiveness is inadequate, and noted that well-controlled clinical trials and a favorable benefit-risk profile are required for approval. The documents also revealed that 7% of the 122 patients treated with the Melblez Kit died as a result of the treatment. On this news, Delcath's share price declined $0.558—or over 40%—to close at $0.832 per share on April 30, 2013.
On May 2, 2013, Delcath also announced that the ODAC voted 16 to 0 that the benefits of treatment with the Melblez Kit do not outweigh the associated risks. On this news, Delcath's share price declined another $0.3326 or nearly 42%. Overall, after the news of the "refusal to file" letter first reached the market on February 22, 2011, Delcath's share price plummeted from $11.30 per share to close at a mere $0.46 per share on May 3, 2013—a decline of nearly 96%.
If you purchased or otherwise acquired Delcath stock during the Class Period and wish to serve as lead plaintiff, you must act no later than July 8, 2013. To discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, [email protected], or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. For more information, please go to http://www.robbinsarroyo.com.
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SOURCE Robbins Arroyo LLP