Rigel Pharmaceuticals, Inc. Summary: According to a press release dated February 6, 2009, the complaint alleges that Rigel was developing a new drug, R788, for the treatment of rheumatoid arthritis. On December 13, 2007, Rigel issued a press release, which was attached as an exhibit to a Form 8-K filed with the SEC, and held a conference call touting the positive summary results of a then-recently-completed clinical trial of R788 in 189 patients in the U.S. and Mexico (the ‘Study’). In response to the announcement of the summary results of the Study, Rigel’s common stock price more than tripled in one day, from $8 per share to $25.95. On January 24, 2008, Rigel filed the Registration Statement for its offering of common stock, which incorporated by reference the December 13, 2007 Form 8-K. On February 6, 2008, Rigel consummated the Offering, selling five million shares of common stock at a price of $27 per share for proceeds of $135 million. Then, on October 27, 2008, Rigel presented the full results of the Study at a meeting of the American College of Rheumatology and on an investor conference call. Those results contained adverse information omitted from the Company’s December 13, 2007 press release and Form 8-K, as well as from the Registration Statement and subsequent presentations. When this adverse information about the Study’s results was finally disclosed, Rigel’s stock price plunged 38% in a single day, from $14.41 to $8.84.
According to the complaint, the true facts which defendants failed to disclose were: (a) patients in Mexico had higher response rates in both the placebo and treated arms than the U.S. patients, which may have contributed disproportionately to the overall reported benefit observed at the higher doses; (b) R788 caused an increase in average blood pressure which could signal an increase in cardiovascular risk, the mechanism that caused the increase was not well understood and the increase in blood pressure could be a stumbling block for some pharmaceutical companies that were considering licensing the drug; and (c) patients in the Study taking R788 experienced increased liver enzymes compared to patients taking the placebo.
On March 19, 2009, a Stipulation and Consolidation Order was entered by the court granting appointment of lead counsel and consolidation of cases.
On June 09, 2009, an Order Appointing Inter-Local Pension Fund GCC/IBT As Lead Plaintiff And Approving Its Selection Of Lead And Liaison Counsel was granted by the court.
On July 24, 2009, a Consolidated Complaint For Violations Of The Federal Securities Laws was filed in the Northern District Of California in this case on behalf of the lead plaintiffs.
On September 08, 2009, a Notice Of Motion And Motion To Dismiss Consolidated Complaint was filed in the court by the defendants.
On January 27, 2010, an amended complaint consolidated amended complaint for violations of the federal securities laws against the defendants was filed with the court.
On August 24, 2010, another motion to dismiss was granted without prejudice allowing Plaintiff shall file any amended complaint within thirty days of the date of this Order.
A subsequent Notice on September 22, 2010, was filed by the plaintiffs electing to stand on the Amended Complaint. The Lead Plaintiff respectfully requested that final judgment be entered so that appeal can be taken therefrom.
On October 28, 2010, the Lead Plaintiff decided to stand on its Consolidated Amended Complaint for Violations of the Federal Securities Laws and requested that final judgment be entered dismissing this action with prejudice so that appeal can be filed. Thus, a Judgment was entered in favor of defendants.
On November 15, 2010, a Notice of Appeal was filed by the plaintiffs in the Ninth Circuit, appealing the dismissal order issued by the District Court.
SIC Code: 2834
Industry: Biotechnology & Drugs
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