This securities class action is built around statements about the drugs Herceptin and Perjeta, designed for the treatment of HER2-positive breast cancer—statements that the complaint claims violate the Securities Exchange Act of 1934.
The class for this action is all persons or entities who acquired the publicly-traded securities of Roche from March 2, 2017 through June 5, 2017.
Roche is a Swiss company that engages in the pharmaceuticals and diagnostics business internationally. At the beginning of the class period, March 2, 2017, it put out a press release claiming that a Phase III study had showed that Roche’s Perjeta regimen, when added to Herceptin and chemotherapy treatment, helped people with an aggressive type of early breast cancer live longer without the disease returning than Herceptin and chemotherapy alone.
The press release said that the data would be discussed with health authorities such as the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA). It called the reduction in recurrence “statistically significant” and said that “no new safety signals were identified.”
However, the complaint claims that the statements were misleading because the combination of Perjeta and Herceptin is “only marginally more effective” than Herceptin alone.
On June 5, 2017, Roche put out a press release that contained actual figures for recurrence in the study, and, as quoted in the complaint, the margins were small: After three years, 94.1% of patients taking the Perjeta-Herceptin combination were free of disease as opposed to 93.2% of those taking Herceptin alone.
On the same day, Financial Times put out an article entitled, “Roche suffers blow over breast cancer combination therapy” with the subtitle, “Large trial shows only marginal benefit from taking cocktail of Herceptin and Perjeta.” The article said that doctors might refrain from prescribing the combination because of the expense—each costs about $70,000 for a year of treatment—and because Perjeta causes severe diarrhea in roughly one in ten patients.
On the same day, Bloomberg published an article on the same topic, with the title, “Roche’s Pricey New Breast-Cancer Combo Barely Beats Old Drug”; and Fox Business one with the title, “Study Questions Value of Costly Cancer-Drug Combinations.”
As a result of the news, Roche’s stock fell by about 5%.
The complaint claims that Roche’s previous statements had been misleading, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.