Ocular Therapeutix Class Action Lawsuit
As previously posted, a class action lawsuit has been filed against Ocular Therapeutix, Inc. (“Ocular”) (NASDAQ: OCUL) and certain of its officers and directors for violations of the federal securities laws.
The class action lawsuit, brought on behalf of investors who purchased or otherwise acquired Ocular securities between May 5, 2017 through July 6, 2017, inclusive (the “Class Period”), alleges that throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (1) Ocular Therapeutix’s management has been misleading investors about DEXTENZA manufacturing issues, including that more than 50% of lots manufactured by Ocular Therapeutix contain bad product; (2) such manufacturing issues could imperil the approval of DEXTENZA by the FDA; and (3) as a result, defendants’ public statements were materially false and misleading at all relevant times.
The lawsuit seeks to recover damages for Ocular Therapeutix investors under the federal securities laws.
Seeking Alpha Reports: “Ocular: A Poke In The Eye”
On Jul 6, 2017, near the close of trading, Seeking Alpha published an article, “Ocular: A Poke In The Eye,” which reported that Ocular’s Dextenza is
- . . . unlikely to get approved by the FDA on July 19 PDUFA date.
- Management has been misleading investors about manufacturing.
- OCUL’s hydrogel technology is worthless at the moment.
According to Seeking Alpha, OCUL “. . . had a lot of potential. Unfortunately, [however,] management has failed to execute and brought the company to the brink of collapse. It is not suprising . . . that the ENTIRE senior management has resigned recently (CFO, CMO and CEO).”
Further, Seeking Alpha reported that
OCUL has disclosed that they received a second 483 from the FDA after their facility re-inspection. Even a layperson . . . can tell that the company is having serious manufacturing issues, and their whole approach to manufacturing and patient safety is highly questionable. What’s more troubling is that either management doesn’t fully understand the letter, or they have been misleading investors. Both are bad. [The second 483 can be read by clicking here: OCUL_Second_483].
Manufacturing Issues & Dextenza
OCUL, according to Seeking Alpha,
. . . has disclosed that they received a second 483 from the FDA after their facility re-inspection. Even a layperson reading this can tell that the company is having serious manufacturing issues, and their whole approach to manufacturing and patient safety is highly questionable. What’s more troubling is that either management doesn’t fully understand the letter, or they have been misleading investors. Both are bad.
Further, Seeking Alpha reported:
First, OCUL has REPEAT observations. Not only did they not resolve prior issues, but have committed worse transgressions. [The first 483 can be read by clicking here: OCUL_483].
Observation 6 reads: “Laboratory controls do not include the establishment of scientifically sound and appropriate test procedures designed to assure that drug products conform to appropriate standards of identity, strength, quality and purity.”
Observation 5 of the second 483 reads: “Laboratory controls do not include the establishment of scientifically sound and appropriate specifications and test procedures designed to assure that drug products conform to appropriate standards of identity, strength, quality and purity.” Sounds familiar?
Observation 3 of the second 483 reads: “There are no written procedures for production and process controls designed to assure that the drug products have the identity, strength, quality, and purity they purport or are represented to possess. Specifically, your firm lacks documentation to show that your product can consistently meet specifications as you have not systemically evaluated the [redacted] lots manufactured from FEB2016 to present, of which [redacted] failed specification and were disposed of in-process[. . . .]”
In plain English, this means, OCUL still doesn’t know to make their product consistently. How does OCUL deal with instances when product doesn’t meet specifications? They have been discarding bad manufacturing lots without investigation.
Second, OCUL has characterized their manufacturing as “in a fully developed mode.” Well, Observation 1 of the second 483 reads: “Particulate matter has been noted in 10/23 lots (intended use clinical, R&D, stability, etc.) manufactured from FEB2016 to date. The remaining [redacted] lots were scrapped prior to the visual inspection therefore their particulate status remains unknown.”
In plain English, this means that more than 50% of lots manufactured by OCUL contain bad product. That leaves plenty of room for additional development. Sometimes, OCUL has had to discard entire lots because they were out of spec!!
Third, if OCUL only discarded bad product without investigation, that would be a bad thing. But in fact, they have been using bad product in clinical trials and have released some into their commercial supply!
Following this news, Ocular’s share price fell 6% on July 6, 2017, and plummeted an additional 25% on July 7, 2017 to $7.12, causing significant harm to investors.
Then, on July 11, 2017, Ocular Therapeutix announced that it received a Complete Response Letter from the FDA denying Ocular’s resubmission of a New Drug Application for Dextenza. According to the company, the FDA’s letter referenced deficiencies in manufacturing processes and analytical testing discovered in the May 2017 inspection. This news sent the share price tumbling in after-hours trading by more than 30%.
Do You Have Ocular Therapeutix Losses?
If you purchased or otherwise acquired shares in Ocular Therapeutix and would like to speak privately with a securities attorney to learn more about the investigation, fill out the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; or send an e-mail to [email protected].
About Kehoe Law Firm, P.C.
The Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.