SAN DIEGO, April 5, 2018 /PRNewswire/ -- Johnson Fistel, LLP is investigating potential violations of the federal and state securities laws by Celgene Corporation, (NASDAQ: CELG) ("Celgene") and certain of its officers.
Recently a Securities Class Action Complaint was filed on behalf of those who purchased securities of Celgene between September 12, 2016, and February 27, 2018. The complaint charges Celgene and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Celgene is a biotechnology company that specializes in the discovery, development, and commercialization of therapies for the treatment of cancer and inflammatory diseases. Its most successful drug is Revlimid, a drug for the treatment of multiple myeloma (a type of plasma cell cancer). However, Revlimid will lose its patent exclusivity in the coming years, at which point cheaper generics will be able to enter the market. As a result, it was important that the Company develop and successfully commercialize new drugs to diversify and ultimately replace its reliance on revenues from Revlimid sales, with the three most promising replacements being GED-0301, a late-stage developmental treatment for Crohn's disease, Otezla, a commercial-stage treatment for psoriasis, and Ozanimod, a developmental treatment for relapsing multiple sclerosis and ulcerative colitis.
The complaint alleges that during the Class Period, defendants made false and misleading statements and failed to disclose adverse information regarding Celgene's business and the prospects for its drug products. Specifically, defendants failed to disclose that trials for GED-0301 suffered from fatal design defects, such that GED-0301 had failed to demonstrate meaningful clinical efficacy, and that, as a result, there was an undisclosed risk and high likelihood that Celgene would be unable to develop GED-0301 into a commercially viable treatment for Crohn's disease. In addition, defendants also failed to disclose that the growth of Otezla sales had dramatically slowed during Celgene's third fiscal quarter of 2017 and that the clinical and nonclinical pharmacology data in Celgene's new drug application ("NDA") for Ozanimod were insufficient to permit a complete review by the FDA, which resulted in the FDA issuing a refusal to file letter to Celgene regarding the NDA. As a result of these false statements and omissions, the price of Celgene stock was artificially inflated during the Class Period to over $145 per share.
On October 19, 2017, the Company revealed that it would be abandoning GED-0301, discontinuing ongoing trials, and would record a $1.6 billion impairment charge as a result of the drug's failure. On October 26, 2017, the Company revealed that certain of its key drugs had badly missed sales expectations for the quarter. Most notably, sales for Otezla – which management had recently claimed were "going very, very well" – had slowed to only 2% U.S. growth, compared to 41% year-over-year growth in the prior quarter. Then, after the market closed on February 27, 2018, Celgene disclosed that it had received a refusal to file letter from the FDA in connection with the Company's NDA for Ozanimod. The Company revealed that both the clinical and nonclinical pharmacology sections of its NDA were found deficient by regulators. On this news, the price of Celgene stock dropped 9%, or $8.66 per share, to close at $87.12 per share on February 28, 2018.
If you have held Celgene shares continuously before September 12, 2016, you may have standing to hold Celgene harmless from the damage the officers and directors caused by making them personally responsible. You may also be able to assist in reforming the Company's corporate governance to prevent future wrongdoing.
If you are a Celgene shareholder continuously holding shares before September 12, 2016, and are interested in learning more about your legal rights and remedies, please contact Jim Baker (firstname.lastname@example.org) at 619-814-4471. If you email, please include your phone number.
About Johnson Fistel, LLP:
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SOURCE Johnson Fistel, LLP