SAN DIEGO–LAWFUEL – Class Action Lawsuit –Lerach Coughlin Stoia Geller Rudman & Robbins LLP (“Lerach Coughlin”) (http://www.lerachlaw.com/cases/nuvelo/) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of purchasers of Nuvelo, Inc. (“Nuvelo”) (NASDAQ:NUVO) publicly traded securities during the period between January 5, 2006 and December 8, 2006 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, William Lerach or Darren Robbins of Lerach Coughlin at 800/449-4900 or 619/231-1058, or via e-mail at [email protected] If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.lerachlaw.com/cases/nuvelo/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Nuvelo and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Nuvelo is a biopharmaceutical company engaged in the development and commercialization of acute cardiovascular and cancer therapies.
The complaint alleges that Nuvelo misrepresented its chances of obtaining Food and Drug Administration (“FDA”) approval of a purported new blood clot dissolver, alfimeprase. The complaint alleges that despite the fact that 80% of Nuvelo’s value was attributed to this drug, the Company’s top officers concealed that their own clinical data demonstrated alfimeprase was ineffective in dissolving blood clots.
On December 14, 2005, the Company announced it had received a Special Protocol Assessment (“SPA”) agreement from the FDA, claiming that the SPA would solidify the regulatory pathway to approval for alfimeprase. Defendants also stated their “power calculations” demonstrated alfimeprase’s efficacy as a drug candidate. During a January 5, 2006 conference call, defendants confirmed they believed alfimeprase would reach the U.S. consumer market by 2008 and that alfimeprase would generate $500 million in annual sales in the U.S. alone. The complaint alleges Nuvelo’s stock price surged on this news and remained inflated throughout the Class Period while Nuvelo issued and sold 7.5 million shares of its common stock in an underwritten offering on January 30, 2006, receiving over $119 million in proceeds.
Then on December 11, 2006, Nuvelo disclosed that alfimeprase had completely failed its clinical trials. During the conference call following the announcement, Nuvelo’s CEO admitted that alfimeprase failed to perform better than placebos and that previously reported positive results were due to drug injections washing clots away rather than dissolving them. On this news the Company’s stock fell 80%, erasing over $800 million in market capitalization.
According to the complaint, the true facts, which were known by each of the defendants but concealed from the investing public during the Class Period, were that: (i) Nuvelo had no reliable clinical data suggesting that alfimeprase “dissolved” blood clots when applied to them through a catheter, other than physically washing them away; (ii) Nuvelo had no “power calculations” suggesting alfimeprase would out-perform a placebo as required to demonstrate the efficacy the FDA would demand; and (iii) defendants knew the decision of Amgen, the drug’s original developer, to walk away in December 2004 was based on Amgen’s educated suspicion (based on clinical data also known to defendants) that alfimeprase would likely not pass FDA muster and thus was not a commercially viable drug candidate.
Plaintiff seeks to recover damages on behalf of all purchasers of Nuvelo publicly traded securities during the Class Period (the “Class”). The plaintiff is represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Lerach Coughlin, a 180-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston, Philadelphia and Seattle, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Lerach Coughlin lawyers have been responsible for more than $20 billion in aggregate recoveries. The Lerach Coughlin Web site (http://www.lerachlaw.com) has more information about the firm.