Robbins Arroyo LLP: Galena Biopharma, Inc. (GALE) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Galena Biopharma, Inc. (“Galena”) (NASDAQCM: GALE) in the U.S. District Court for the District of New Jersey. The complaint is brought on behalf of all purchasers of Galena securities between August 11, 2014 and January 31, 2017, for alleged violations of the Securities Exchange Act of 1934 by Galena’s officers and directors. Galena, a biopharmaceutical company, focuses on developing and commercializing oncology therapeutics that address major unmet medical needs. Galena’s first commercial product is known as Abstral, which is designed to treat pain in certain cancer patients.
Galena Accused of Engaging in Unsustainable Sales and Marketing Practices
According to the complaint, on August 11, 2014, Galena submitted a Form 10-Q for the second quarter of 2014 with the U.S. Securities and Exchange Commission that attested to the accuracy of the financial statements, the disclosure of any material changes to the company’s internal control over financial reporting, and the disclosure of all fraud. On March 5, 2015, Galena filed a Form 10-K for the year 2014 which revealed that the company achieved its target revenue from the sale of Abstral for 2014. In addition, the company announced results of operations from the quarter and the fiscal year ended December 31, 2014, including net revenue of $9.3 million from the sale of Abstral, and reiterated its 2015 net revenue expectations of $15-18 million. However, the complaint alleges that Galena officials failed to disclose that the company’s sales of Abstral were based on unsustainable sales and marketing practices and that such sales and marketing practices could subject the company to a criminal investigation.
On December 22, 2015, Galena disclosed that it had received a subpoena from the U.S. Attorney’s Office for the District of New Jersey that requested the production of a broad range of documents pertaining to marketing and promotional practices related to Abstral. The company subsequently stated that it may be subject to civil and criminal penalties, damages, fines, or an administrative action of exclusion from government health care reimbursement programs. On January 31, 2017, Galena announced the resignation of its President and Chief Executive Officer, Mark W. Schwartz. That same day, TheStreet.com published an article noting that Schwartz’s exit with the company shortly followed the company’s admission of a criminal investigation by federal prosecutors. On this news, Galena’s stock fell $0.53 per share, or over 32%, to close at $1.12 per share on February 2, 2017.
Galena 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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