Kehoe Law Firm reports that its securities investigation of Prothena Corporation continues, and that on May 15, 2018, a securities class-action lawsuit was filed in United States District Court, Northern District of California, against Prothena Corporation (NASDAQ: PRTA) and certain of its current and former executive officers on behalf of all persons or entities that purchased Prothena’s publicly-traded common stock between October 15, 2015 and April 20, 2018, inclusive (the “Class Period”).
The class action complaint against Prothena and certain of Prothena’s senior executives allege violations of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 and Rule 10b-5, promulgated thereunder.
Investors Who Purchased the Securities of Prothena Between October 15, 2015 and April 20, 2018 Are Encouraged to Contact Kehoe Law Firm, P.C. To Discuss the Class Action Investigation and Potential Legal Options. Prothena investors have until July 16, 2018 to File a Motion with the Court to Serve as Lead Plaintiff.
According to the complaint, the class action against Prothena
. . . arises from Defendants misrepresentations and material omissions regarding NEOD001’s clinical trial results and prospects for approval. Throughout the Class Period, Defendants cited the “best response” results of Prothena’s ongoing Phase 1/2 clinical study of NEOD001 as evidence that the drug was effective, while withholding relevant trial data showing that NEOD001 was not an effective treatment for AL amyloidosis. In addition, Defendants made misleading comparisons of NEOD001’s “best response” rates against prior studies that measured sustained responses after a specified period of time, and falsely told investors that Prothena’s ongoing Phase 1/2 study provided a strong basis for late-stage Phase 2b and Phase 3 studies of NEOD001. In truth, the full Phase 1/2 study data demonstrated that NEOD001 was not an effective treatment for AL amyloidosis and did not provide an adequate basis for the late-stage Phase 2b and Phase 3 studies. (Emphasis added)
Further, the complaint states:
Throughout the Class Period, Defendants continued to tout the interim results of the Company’s Phase 1/2 study to create the impression that NEOD001 would obtain final approval after completion of its late-stage Phase 2b PRONTO and Phase 3 VITAL studies. For example, on September 12, 2016, during the Morgan Stanley Global Healthcare Conference, Defendant Tran B. Nguyen . . ., the Company’s Chief Financial Officer, stated that the “exciting findings” from the Phase 1/2 expansion study “has to go back to what does it say about PRONTO and VITAL.” Analysts accepted Defendants’ positive statements regarding NEOD001’s efficacy and the Phase 1/2 study results and viewed the Company’s Phase 1/2 study results as indicative of the likely success of the ongoing Phase 2b and Phase 3 trials. For example, on December 5, 2016, a Credit Suisse analyst noted that the final Phase 1/2 study results helped “derisk the ongoing PRONTO and VITAL studies.”
In truth, Prothena’s “best response” analyses did not present a fair representation of the efficacy of NEOD001, particularly when compared to prior studies. What Prothena referred to as the “best response” rate was selected by the Company from among all the data points in their study. After cherry-picking the best response among the available data points for each patient, Prothena then compared that result to studies that used a single data point at the end of a predetermined length of time, creating a false impression that NEOD001 was effective. Prothena never disclosed the full results of its Phase 1/2 testing – namely, the month-to-month response rate of each patient during the study – which would have permitted investors to conduct a fair comparison against the historical data. (Emphasis added)
Prothena Announces Discontinuance of Development of Drug for Treatment of AL Amyloidosis
On April 23, 2018, Prothena Corporation announced that it
. . . is discontinuing development of NEOD001, an investigational antibody that was being evaluated for the treatment of AL amyloidosis. The decision was based on results from the Phase 2b PRONTO study and a futility analysis of the Phase 3 VITAL study.
Based on the results from the Phase 2b PRONTO study, which did not meet its primary or secondary endpoints, [Prothena] asked the independent data monitoring committee (DMC) of the Phase 3 VITAL study to review a futility analysis of the ongoing VITAL study. The DMC recommended discontinuation of the VITAL study for futility. [Prothena] therefore decided to discontinue all development of NEOD001, including the VITAL study as well as the open label extension studies. (Emphasis added)
Prothena Stock Drops $25.34, or 68.78%, to Close at $11.50 on April 23, 2018
Based on Prothena’s announcement regarding the discontinuance of the development of NEOD001, Prothena’s stock dropped almost 70%, thereby injuring investors.
Prothena Investors and Shareholders
If you purchased, or otherwise acquired, Prothena stock during the Class Period and have questions or concerns about the class action lawsuit or your potential legal rights, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Investors who purchased Prothena stock during the Class Period and suffered damages have until July 16, 2018 to seek appointment as lead plaintiff. Please note that no class has been certified in the above action, and until a class is certified, you are not represented by counsel unless you retain an attorney of your choice. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may serve together as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.