The complaint for this securities class action claims that Ophthotech artificially inflated its stock price by making overly positive statements about its lead drug candidate, in violation of the Securities Exchange Act of 1934. When the final results of its Phase 3 trials emerged, showing no significant effects, the stock’s fall was swift and sharp, losing 86% of its value over just a few days.
The class for this action is all persons who acquired Ophthotech common stock between May 11, 2015 and December 12, 2016.
Ophthotech is a clinical-stage biopharmaceutical company that creates treatments for back-of-the-eye diseases, such as age-related macular degeneration (AMD). AMD comes from blood vessels that leak fluid or blood into the center of the retina, causing blurred vision or blind spots in a person’s visual field. During the class period, the company’s most advanced product candidate was a treatment for “wet AMD” called Fovista.
Before the beginning of the class period, the company had completed Phase 1 and Phase 2 studies of the use of Fovista in combination with Lucentis, another AMD treatment. The complaint quotes from a press release claiming that Fovista provided a 62% increase in visual outcome over Lucentis alone.
Based on these results, the complaint says, the company held an initial public offering (IPO) in September 2013 and a secondary public offering a few months later in February 2014, with the proceeds to go for Phase 3 trials. To be successful, the trials only had to prove that the combination of the two drugs worked significantly better than Lucentis alone after twelve months.
On May 11, 2015, the beginning of the class period, the company put out a press release saying that it had completed enrollment for its first Phase 3 trial. It announced completed enrollment in the second trial in October, with the company’s CEO saying that the combination of Fovista and Lucentis “may represent a significant advancement in the treatment of wet AMD…”
On November 5, the company issued a press release announcing its results for the third quarter of 2015 and saying that the trials were making “excellent progress.”
The company continued to make positive statements about Fovista in its public statements, saying in June 2016 that it was “the most advanced anti-PDGF agent in development for the treatment of wet AMD and … is expected to be first to market in this class of novel therapies…”
Unfortunately, on December 12, 2016, the company issued a press release saying that the trials had failed to achieve their primary endpoints of better visual acuity after twelve months than Lucentis alone. Fovista plus Lucentis had a slight edge over Lucentis alone, but it was not statistically significant.