According to the docket dated February 28, 2005, on February 23, 2005, a Notice of Voluntary Dismissal was filed by defendants. Lead plaintiff voluntarily dismisses the action and this dismissal is with prejudice as to lead plaintiff only.
On November 2, 2004, the Court granted defendants' motion to transfer case to the Central District of California and the case was transferred on November 24, 2004.
The original Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between February 19, 2002 and September 24, 2003.
Specifically, the action alleges that defendants made materially false and misleading statements with respect to the drug Abraxane, a reformulated version of Taxol, under development for the treatment of breast cancer. Throughout the Class Period, defendants touted Abraxane as a safer and more effective alternative to Taxol, the world's best-selling chemotherapy drug for cancer. Defendants claimed that clinical studies had indicated that: (1) Abraxane could be administered without Cremophor, a toxic substance with severe side-effects that limited the tolerable dose and effectiveness of Taxol; (2) unlike Taxol,
Abraxane could be administered without the need for potentially harmful steroid pre-medication and other drugs that reduce the loss of white blood cells; (3) because Abraxane was not formulated with a toxic substance it could be delivered in much higher doses than Taxol and was therefore more effective than Taxol with respect to reduction in tumor size; and (4) because it can be injected intravenously directly to the location of the tumor, Abraxane therapy is only one-half hour, compared to 3 hours for Taxol. The Company stated, repeatedly, that studies indicated that "ABI-007 (Abraxane) is apparently well tolerated" at high doses (. . .) without the need for steroid premedication and G-CSF support.
Further, the complaint alleges that on September 24, 2003 defendants issued an ostensibly positive news release to announce the preliminary results of Phase III testing of Abraxane. However, commentators noted that the news release did not include the data underlying the trial results, and that the trial lacked a common safeguard known as double blinding designed to prevent research bias, since doctors and patients both knew whether Abraxane or Taxol was in use. Moreover, in the release APP narrowed some of its claims for Abraxane, stating not that Abraxane was well tolerated without the need for steroid premedication and G-CSF support (to reduce loss of white blood cells) but rather, noted the absence of "severe hypersensitivity reactions despite no routine pre-medication in patients receiving Abraxane" and stated that the procedure was to administer Abraxane "without routine steroid pretreatment or growth factor support." The lack of backup data, and the distinction between "no steroid pretreatment" and "no routine steroid pretreatment" was not lost on investors; as the market digested the release and its implications, APP's share price fell 32% from a Class Period high of $44.14 on September 24, 2003 to a closing price of $29.59 on September 26, 2003. Two trading days before the announcement --- but after APP had seen the Phase III trial results --- defendant Patrick Soon-Shiong ("Soon-Shiong") disposed of 300,000 shares of his personally held APP stock while the stock was trading at between $38.68 and $35.47.