The Complaint alleges that defendants violated the anti-fraud provisions of the federal securities laws, by issuing a series of materially false public statements during the Class Period thereby artificially inflating the price of GPC Biotech securities. GPC Biotech had spent years attempting to successfully develop it key drug Satraplatin, an oral drug therapy whose goal is to increase overall survival rates, reduce pain, and produce "progression free survival" for advanced prostate cancer patients, and needed to convince investors and collaboration partners who were funding the Company each year that it was making substantial progress toward Satraplatin's "early" FDA approval to obtain continued funding.
However, unbeknownst to public investors, the Phase 3 trial that needed to be conducted for Satraplatin was deeply flawed and employed improper methods for measuring Satraplatin's efficacy. The defendants knew of these gross irregularities not only because of their substantial experience in pharmaceutical development and testing, but also because (as was revealed at the end of the Class Period) they were specifically warned by FDA representatives during Satraplatin's development phase that they were deviating from accepted methodologies, and that the "endpoint" they had selected was one with which the FDA was "unfamiliar" and had "no prior experience." Thus Defendants knew that there was a very substantial chance that the FDA would not approve the drug.
The complaint alleges that Defendants stayed silent about the adverse facts regarding Satraplatin and its unapproved endpoint methodology until they were forced to address them due to FDA disclosures. On May 15, 2007, the Company announced that the FDA would consider approval of Satraplatin at a meeting scheduled for July 24, 2007.
The complaint alleges that on July 24, 2007, the FDA announced that its oncology panel had unanimously recommended against the approval of Satraplatin. The committee said the FDA had no prior experience with that type of endpoint, an issue which was "clearly communicated" to GPC Biotech while the drug was in development.
In reaction to these unexpected revelations, GPC Biotech stock fell $7.20 on July 25, 2007 to close at $13.16.
On January 8, 2008, Judge Denny Chin signed the Order consolidating the actions under In Re GPC Biotech AG Securities Litigation, Civil Action No. 1:07-cv-6728(DC). According to the Order, Class member Axxion is appointed to serve as Lead Plaintiff in this action and Labaton Sucharow LLP is approved as Lead Counsel for the Class. On March 12, 2008, the plaintiffs filed a Consolidated Class Action Complaint. The defendants filed a motion to dismiss on May 15, 2008, and on February 13, 2009, Judge Chin signed the Ppinion denying the motion to dismiss. On March 12, 2009, Judge Chin vacated the earlier February 13th Opinion and granted the defendants’ motion to dismiss. On December 29, 2009, Judge Chin denied the plaintiffs' motion for leave to amend the complaint. On December 39, 2009, the Clerk’s Judgment was entered and the case was dismissed with prejudice.