Misleading Disclosure of Clinical Trial Results

Plaintiffs filed a securities class action against a major pharmaceutical company alleging that the company made false and misleading statements regarding the results of a drug’s safety study.

Plaintiffs filed a securities class action lawsuit against a major pharmaceutical company alleging that the company made false and misleading statements regarding the results of a drug’s safety study. Specifically, the plaintiffs contended that the safety study indicated that the drug was no safer than its alternatives and that the company altered the protocols of the study to present the results in a more favorable light. As a result of these alleged misrepresentations, the plaintiffs contended that the company’s stock and bonds traded at artificially inflated prices. The plaintiffs alleged that an article in a medical journal and subsequent public press revealed unfavorable results from the safety study.

The expert documented that all of the facts contained in the allegedly corrective information had previously been in the public domain.

Working with Cornerstone Research, a finance expert examined whether the allegedly corrective disclosures were associated with statistically significant changes in the company’s stock price. He found that the statistical evidence did not establish a causal link between the release of allegedly corrective disclosures and decreases in the company’s stock price. Furthermore, the expert documented that all the facts contained in the allegedly corrective information had previously been in the public domain. Finally, an analysis of the market for the company’s corporate bonds showed that they did not trade in a well-developed, efficient market.