Robbins Arroyo LLP: Arrowhead Pharmaceuticals, Inc. (ARWR) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP, announces that a class action complaint was filed against Arrowhead Pharmaceuticals, Inc. (“Arrowhead”) (NASDAQGS: ARWR) in the U.S. District Court for the Central District of California. The complaint is brought on behalf of all purchasers of Arrowhead securities between January 12, 2015 and November 29, 2016, for alleged violations of the Securities Exchange Act of 1934 by Arrowhead’s officers and directors. Arrowhead develops novel drugs to treat intractable diseases in the United States. Among Arrowhead’s products under development is ARC-520, a drug designed to treat chronic hepatitis B virus (“HBV”) infection.
Arrowhead Accused of Overstating the Approval Prospects of Its Drug
According to the complaint, Arrowhead presented promising data for its ARC-520 studies in a series of filings with the U.S. Securities and Exchange Commission. Arrowhead repeatedly touted that “no dose-limiting toxicities or serious adverse events have been observed to date” and that “ARC-520 was well tolerated.” The company further stated that ARC-520 “led to robust, sustained anti-viral effects in chimpanzees with chronic HBV.” Arrowhead also emphasized that 78% of HBV-infected chimpanzees treated with ARC-520 in combination with nucleotide analogs exhibited signs of immune reactivation, which is likely a necessary step for achieving a cure for HBV. However, the complaint alleges that Arrowhead officials did not disclose that:
(1) ARC-520 was fatal at certain doses; (2) consequently, the U.S. Food and Drug Administration (“FDA”) was unlikely to approve ARC-520 as a hepatitis B treatment; and (3) Arrowhead had overstated the approval prospects and commercial viability of ARC-520.
On November 8, 2016, Arrowhead issued a press release revealing that the FDA will be placing a hold on its Heparc-2004 clinical study of ARC-520, likely due to deaths at the highest dose of an ongoing non-human primate toxicology study. Arrowhead further stated three serious adverse events have been observed, and that the cause of the animal deaths is unknown and under investigation. Then, on November 29, 2016, Arrowhead announced that it will “discontinue development of clinical-stage drug candidates ARC-520, ARC-521, and ARC-AAT” and cut its workforce by approximately 30%. On this news, Arrowhead’s stock fell $2.95 per share, or approximately 67%, to close at $1.44 per share on November 30, 2016.
Arrowhead 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.
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