Inotek Pharmaceuticals Corporation was working on two different treatments with its most promising drug, but the complaint for this securities class action claims that the company made false or misleading statements during its studies, in violation of the Securities Exchange Act of 1934.
The class for this action is all persons who bought Inotek common stock between July 23, 2015 and July 10, 2017.
Inotek Pharmaceuticals is a clinical-stage biopharmaceutical company that develops and commercializes treatments for eye diseases. During the class period, Inotek was working on two potential treatments designed to reduce inter-ocular pressure (IOP) in patients who have glaucoma. Both used the company’s most advanced product candidate, trabodenoson, one as a monotherapy and the other as a fixed-dose combination (FDC) with latanoprost, another glaucoma treatment.
The company began its work on trabodenoson with a Phase 1 study testing the safety and tolerability of the drug as a monotherapy and evaluating different dosages. A Phase 2 study was begun in 2014 to test trabodenoson in combination with latanoprost.
In 2015, the Food and Drug Administration (FDA) gave the company permission to proceed to a Phase 3 study, the MATrX-1 study. This study hoped to show the effectiveness of trabodenoson as a monotherapy to reduce IOP.
During the class period, the complaint claims, the company called the Phase 2 trials “successful” and said they were a “meaningful accomplishment” and that the Phase 3 trial was “optimized for success.” The complaint says the company also claimed that the drug could be used with once-a-day dosing, which would have been a considerable advantage over competing drugs, which had to be used multiple times per day.
While the MATrX-1 study was in progress, the company began recruiting for a Phase 2 FDC trial. The press release announcing this described the drug as having “two complementary eye pressure lowering mechanisms, and an optimized safety and efficacy profile” for accomplishing the treatment.
The first bad news came in January 2017, when the company revealed that the MATrX-1 Phase 3 trial was unsuccessful, in that it did not demonstrate benefits to glaucoma patients, even in comparison to placebo. Since the company had been making statements indicating that Phase 2 trials had found it useful, this news caused the company’s stock price to fall. However, the complaint claims that the company continued to state that the drug was promising as an FDC.
Finally, on July 7, 2017, the company announced that its Phase 2 FDC trial of the drug combination had failed, offering “no clinically meaningful advantage in eye pressure reduction” compared to the other drug alone. This time, the fall in the company’s stock price was nearly 48% over just a few days.
As of the date of filing of this case, the complaint says, Inotek has abandoned the development of trabodenoson.