According to a press release dated March 5, 2010, the complaint alleges that, during the Class Period, defendant Palmin made positive statements regarding the pivotal Phase 3 clinical trial of the Company's primary new drug candidate, NOV-002, which was being evaluated as a treatment for advanced non-small cell lung cancer when used in combination with first-line chemotherapy. Defendant Palmin stated, among other things, that the NOV-002 Phase 3 trial had lasted longer than anticipated because patients in the trial were living longer than the Company expected. The complaint further alleges that these statements were materially false and misleading because defendant Palmin knew, or recklessly disregarded, that the unexpected length of the trial could be, and was, in fact, caused by the survival times of the patients in the control arm of the study who did not receive NOV-002.
On February 24, 2010, the Company announced that NOV-002 did not meet its primary endpoint of improvement in overall survival in the Phase 3 trial. Indeed, it was disclosed that the trial's duration was longer than originally anticipated not because of NOV-002's efficacy, but because the patients in the control arm of the trial – who did not receive NOV-002 – lived longer than expected. On this news, shares of the Company's stock declined more than 80%, from a close of $1.65 per share on February 23, 2010, prior to announcement of the results of the NOV-002 Phase 3 trial, to a close of $0.32 per share on February 24, 2010, after announcement of the Phase 3 trial results, on unusually heavy trading volume.
On October 01, 2010, an Order Appointing Lead Plaintiffs and Approving Selection Of Counsel was issued by the Court in this action. On October 22, 2010, an Amended Complaint was filed by the Lead Plaintiffs in this case against the Defendants.
According to the Memorandum and Order signed by Judge Nathaniel M. Gorton on June 23, 2011, the defendants' motion to dismiss the Amended Class Action Complaint (Docket No. 27 ) is allowed and the case is dismissed without prejudice. The civil case is now terminated.
On August 5, 2011 the plaintiffs filed a Second Amended Class Action Complaint against all defendants.
On June 11, 2012, Judge Nathaniel M. Gorton signed the Memorandum and Order granting defendants' motion to dismiss and dismissing this case with prejudice.