Robbins Arroyo LLP: Celladon Corporation (CLDN) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a federal securities fraud class action complaint was filed in the U.S. District Court for the Southern District of California. The complaint alleges that officers and directors of Celladon Corporation (NASDAQ: CLDN) violated the Securities Exchange Act of 1934 between July 7, 2014 and June 25, 2015, by making materially false and misleading statements about Celladon’s business prospects. Celladon is a clinical-stage biotechnology company that focuses on developing cardiovascular gene therapy and calcium dysregulation. The company’s lead product candidate is MYDICAR, which was its first most promising investigational drug for heart failure patients.
Celladon Engages In Fraudulent Business Practices
According to the complaint, on April 26, 2015, Celladon issued a press release announcing that its CUPID2 trial of MYDICAR did not meet its goals. CUPID2 was a placebo-controlled trial that was designed to evaluate the effects of MYDICAR. Based on the favorable results in Celladon’s CUPID1 trial, it advanced MYDICAR to the CUPID2 trial. However, the complaint alleges that Celladon’s success in its CUPID1 trial was not indicative of success in its CUPID2 trial since its CUPID1 trial was extremely small. Further, the company’s top officers were aware of the limitations of the results from the CUPID1 trial in predicting the success of the CUPID2 trial. When Celladon reported that the trial failed to show a significant treatment effect, its stock plummeted $11.64 per share, or 80%, to close at $2.64 per share on April 27, 2015.
The complaint further alleges that Celladon artificially inflated the prices of its publicly traded securities and permitted company insiders to sell their stock at artificially inflated prices. On June 26, 2015, Celladon announced the suspension of its plans for further research or development of its MYDICAR program and further indicated the company could be liquidated. On this news, Celladon stock dropped $0.85 per share, or 39%, to close at $1.35 per share.
Celladon Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.