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Biopharmaceutical company FibroGen, which produces anemia fighting drug Roxa, made repeated misrepresentations and omissions about the efficacy of the drug, artificially inflating the price of FibroGen’s securities, a class action lawsuit alleges.
The nationwide class action lawsuit was filed in California on May 6 by lead Plaintiff Thomas Leonard, who alleges the company violated the Securities Act with its false and misleading statements about Roxa.
According to the claim, FibroGen failed to disclose key factors about the efficacy and safety of the drug that would influence whether it was approved by the Food and Drug Administration, and lied about it being equal or superior to existing drugs used to treat chronic kidney disease (CKD).
“As a result, FibroGen faced significant uncertainty that its NDA [new drug application] for Roxa as a treatment for anemia of CKD would be approved by the FDA,” the claim states.
“As result of the foregoing, Defendants’ statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.”
According to the class action lawsuit, Phase 3 trials in China showed the drug was not as effective as existing drugs, however, FibroGen raised no concerns or issues with the safety data that was being obtained.
“When the safety data did not meet the requisite statistical threshold to claim that Roxa was not inferior to Epogen (as Defendants knew or recklessly disregarded would happen), Defendants simply claimed that there was ‘no clinically meaningful difference’,” between test results, the class action lawsuit states.
Despite the data in front of them, FibroGen restated in press releases, during investor calls, and at scientific conferences that Roxa appeared to be as safe as, if not safer than, epoetin alfa based on the global Phase 3 studies, the class action lawsuit alleges.
“But, as Defendants knew or should have known, the safety data from the global Phase 3 studies had been manipulated to make Roxa look safer than it is.”
When the truth came out FibroGen shares plummeted over 26 percent, resulting in shareholders losing money on their shares, which had been artificially inflated, the claim states.
Leonard wants to represent FibroGen shareholders nationwide, and is suing for violations of the Securities Exchange Act. He seeks certification of the Class, damages, interest, legal fees, and a jury trial.
In another federal securities class action lawsuit, shareholders of online luxury-goods marketplace The RealReal recently filed a class action lawsuit alleging that members of the company’s executive team, board of directors, and underwriting banks lied to shareholders, artificially inflating share prices.
Do you hold shares in FibroGen? Let us know in the comments section!
Leonard is represented by Ivy T. Ngo, Velvel (Devin) Freedman, and Constantine P. Economides of Roche Freedman LLP.
The FibroGen Shareholders Class Action Lawsuit is Thomas Leonard v. FibroGen Inc., et al., Case No. 3:21-cv-03370, in the United States District Court Northern District of California.
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One thought on FibroGen Lied About Drug Trial Results, Artificially Inflating Share Prices, Class Action Claims
Yes I did hold shares in Fibrogen.