Robbins Arroyo LLP: Puma Biotechnology, Inc. (PBYI) Investors Survive Defendants’ Motion to Dismiss in Securities Class Action
Robbins Arroyo LLP announces that a lawsuit was filed against Puma Biotechnology, Inc. (NYSE: PBYI) in the U.S. District Court for the Central District of California, alleging violations of the Securities Exchange Act of 1934 by Puma’s officers and directors. The court subsequently denied Puma’s motion to dismiss the case (“Motion to Dismiss”) on September 30, 2016. Puma, a development stage biopharmaceutical company, focuses on the development and commercialization of products for the treatment of various forms of cancer.
Puma’s Motion to Dismiss Is Denied
Puma focuses on developing a drug known as neratinib for the treatment of cancer. Neratinib is considered an “extended adjuvant treatment” which is intended to eventually slow down or stop out-of-control cell growth. According to the complaint, Puma officials made false or misleading statements about a clinical trial of neratinib known as ExteNET. Specifically, the complaint alleged that Puma misrepresented the success rate of the ExteNET trial, which was primarily measured by the percentage of disease free survival (“DFS”) among patients taking neratinib versus those taking a placebo, as well as trends in DFS rates over time. When Puma announced positive results from the trial, its stock price increased 295% from $59.03 per share to $233.43 per share on July 23, 2014. The complaint alleged, however, that this stock price was inflated because Puma officials knew the drug was not performing as well as it should be, yet misrepresented the efficacy of the drug to the public.
In denying the motion to dismiss, the court noted that the plaintiff had “adequately and specifically alleged why each of these statements and several others could be false or at least misleading.” The court noted that, “[t]he most direct way to show both that a statement was false when made and that the party making the statement knew it was false is via contemporaneous reports or data, available to the party, which contradict the statement,” concluding that the plaintiff’s complaint adequately alleged Puma officials knew about the allegedly real trial results when the alleged misrepresentations were made. The court further added that the timing of Puma’s alleged misrepresentations and the public offering, among other factors, were sufficient to support a motive to commit the fraud. The court concluded, “[f]or all of these reasons and others, the Court DENIES the Motion to Dismiss.”
Puma 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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