By Wendy S. Salkin
Two investor class-action suits have been filed within days of one another against two different California-based pharmaceutical companies both of which produce hepatitis B treatments, Dynavax Technologies and Arrowhead Pharmaceuticals. The named plaintiffs in both shareholder class-action suits, David Soontjens and Yaki J. Meller, are represented by counsel at Pomerantz, LLP.
Meller v. Arrowhead Pharmaceuticals, Inc., et al., complaint filed (C. D. Cal. Nov. 15, 2016)
On November 15th, named plaintiff Yaki J. Meller filed a Class Action Complaint in the United States District Court for the Central District of California against Pasadena-based Arrowhead Pharmaceuticals, Inc., its President and CEO (Christopher Anzalone), and its CFO (Kenneth Myszkowski). Arrowhead is a biopharmaceutical company that, according to its website, “develops medicines that treat intractable diseases by silencing the genes that cause them.”
Among its clinical stage drugs are ARC-520 and ARC-521, which “are designed to treat chronic hepatitis B virus infection by reducing the expression and release of new viral particles and key viral proteins with the goal of achieving a functional cure.” ARC-520 is the drug at issue. According to the Complaint, Arrowhead knew but failed to disclose that ARC-520 “could be fatal at its higher doses and that the FDA was unlikely to approve the treatment as a result.” In particular, the Complaint alleges that Arrowhead:
made false and/or misleading statements and/or failed to disclose that: (i) the Company’s ARC-520 was unsafe at certain doses and caused deaths in an ongoing primate toxicology study; and (ii) as a result, Arrowhead’s public statements were materially false and misleading at all relevant times.
According to Meller’s Complaint, in so doing, Arrowhead violated Sections 10(b) (“Position Limits and Position Accountability for Security-Based Swaps and Large Trader Reporting.”) and 20(a) (“Liability to contemporaneous traders for insider trading.”) of the Securities Exchange Act of 1934, “Position Limits and Position Accountability for Security-Based Swaps and Large Trader Reporting” and “Liability to contemporaneous traders for insider trading,” respectively, and Securities and Exchange Commission Rule 10b-5, “Employment of manipulative and deceptive devices.”