Positive jury verdict in rare securities class action trial.
Retained by Puma Biotechnology and Latham & Watkins
In a rare securities class action trial, plaintiffs claimed that Puma Biotechnology (Puma) and its CEO made misleading statements about the results of its phase III clinical trial for a breast cancer drug. Puma and its counsel retained Cornerstone Research and Paul Gompers of Harvard University to respond to the plaintiffs’ damages expert.
The plaintiffs’ damages expert testified that these alleged misrepresentations were corrected when the clinical trial results were released on two separate dates and caused Puma’s stock price decline. He presented claims that damages experienced by class members were $87.20 per share.
In his response, Professor Gompers testified that the plaintiffs’ expert had not established loss causation, and had failed to reliably quantify damages for the allegedly corrective disclosures.
The jury found in Puma’s favor on three of the four alleged misrepresentations and awarded only $4.50 per share for the first corrective disclosure date, or less than 5 percent of the claimed damages per share.
“We are pleased that the jury found for Puma on the critical issues surrounding the safety of Neratinib and its sustained effectiveness in preventing the recurrence of the worst type of breast cancer, and that our clients were found not liable for more than 95 percent of plaintiff’s claimed damages. Our expert and his support from Cornerstone Research were essential to the outcome,” notes Latham & Watkins partner Michele Johnson. The Latham team included partners Andrew Clubok, Michele Johnson, Colleen Smith, and Sarah Tomkowiak.
This case is the first federal securities class action to reach a jury verdict in eight years.