Spectrum is a biotechnology company with fully integrated commercial and drug development operations, with a primary focus on oncology and hematology. Spectrum's strategy is comprised of the (i) commercialization of cancer therapeutics through their U.S. direct sales force and international distributors, (ii) completion of studies for new indications of their marketed products, and (iii) the acquisition, development and marketing of a purported broad and diverse pipeline of late-stage clinical and commercial drug compounds.
Who Is Affected?
This federal securities class action is brought on behalf of a class consisting of all persons who purchased Spectrum securities between May 7, 2015 and October 23, 2015, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934. Spectrum was incorporated in Delaware and maintains its principal executive office in Henderson, Nevada. Its common stock trades on NASDAQ under the ticker symbol “SPPI.”
The complaint was filed on November 3, 2015 and is captioned Ira Gains, et al. v. Spectrum Pharmaceuticals, Inc. and Rajesh C. Shrotriya. It was filed in the Nevada District Court and its civil docket number is 2:15-cv-02105-JCM-PAL. The class period runs from May 7, 2015 through October 23, 2015, inclusive.
This complaint involves Spectrum’s drug presently in development, EVOMELA, a formulation of melphalan, which is the drug presently in use for the treatment of multiple myeloma. During the class period, Spectrum repeatedly made misleadingly optimistic statements about EVOMELA, touting it a future driver of Spectrum’s revenues and falsely stating that it “fully expected” the FDA to approve the New Drug Application for EVOMELA by October 23, 2015.
However, on October 23, 2015, Spectrum received a complete response from the FDA indicating it was not approving the new drug application for EVOMELA, causing Spectrum’s stock to decline 20% the same day. The complaint alleges that defendants knowingly made the above false statements because:
This case is in the notice period. When a shareholder brings suit under certain federal securities laws, generally that shareholder must give notice via a press release. This notice starts a sixty-day period of time when any shareholder can investigate the underlying claims of the lawsuit and then elect to bring suit as well. At the end of this sixty-day period, the court appoints one shareholder (or a group of shareholders) to prosecute the securities litigation. We will review the docket again in December and update this page as warranted.