The complaint filed on June 18, 2010, alleges that Defendants concealed material information and made false and misleading statements relating to Wyeth’s most important pipeline drug, bapineuzumab, also known as AAB-001 (hereafter, “B-Mab”), which had the effect of artificially inflating the price of Wyeth securities during the Class Period.
In particular, Defendants improperly touted the success of clinical trial results relating to the safety and efficacy of B-Mab -- a potential billion-dollar-a-year Alzheimer’s drug -- even though they had seen the preliminary results, and thus had knowledge that the trial was an abject failure, missing all clinical endpoints and demonstrating serious safety concerns. Before its acquisition by Pfizer, Wyeth was the world’s fourth largest pharmaceutical company. Developing and commercializing B-Mab was a joint effort between Wyeth and Elan Corporation, plc (“Elan”), a neuroscience-based biotechnology company, domiciled in Ireland. Both Wyeth and Elan had bet hundreds of millions of dollars on B-Mab’s success, most of which was poured into costly clinical research and development programs.
Wyeth did not disclose that the Phase 2 clinical testing results that it saw during its “sneak peek” at the interim data were, in fact, abysmal. Wyeth knew that the Phase 2 trial results showed that for all clinical endpoints, B-Mab was no more effective than a placebo in treating Alzheimer’s. The results, moreover, also showed a host of other problems. For example, higher doses of the drug posed health risks (they were associated with vasogenic edema, a dangerous accumulation of fluid in the brain), and a number of patients taking the drug suffered “micro-bleeds” in their brains, while no patients on placebo suffered similar symptoms.
Three patients in the B-Mab test group died, compared to none in the placebo group. Further, the
drug showed no dose response, meaning higher doses of the drug were not associated with better
results. This suggested that any slight advantage of B-Mab over placebo could have been due to
July 29, 2008, the full results of the Phase 2 trial were finally disclosed at a widely attended medical conference. Investors then learned for the first time about true limits of B-Mab’s efficacy, its many troublesome side effects, and the complete lack of dose response. As one analyst stated, “[E]nough information was revealed to suggest that the Phase  results could be completely invalid.” On this news, Wyeth’s stock price declined 11.9% in a single day (from $45.11 to $39.74, or $5.37) -- the largest single day drop in six years of trading – on extremely heavy volume of over 55 million shares. In this one trading day, Wyeth’s market cap declined by over $7 billion.
A class action complaint has been filed against Elan Corporation in the U.S. District Court for the Southern District of New York, Kleinman, et al. v. Elan Corporation, et al., case number 10-CV-5630. The case contains substantially similar allegations and is in regards to Elan's American Depository Receipts.
On September 24, 2010, the Court issued a Stipulation of Lead Plaintiff Movants and Proposed Order Regarding Selection Of Lead Plaintiff and Lead Counsel. The lead plaintiff filed an Amended Complaint on May 27, 2011.
On February 12, 2012, the Court issued an order granting Defendant's motion to dismiss with prejudice, thereby terminating the case.
On December 18, 2012, the plaintiffs filed a second amended consolidated complaint.
On April 22, 2013, the Court issued an Order granting the Defendants' motion to dismiss the second amended consolidated complaint. On May 3, Plaintiffs filed a Notice appealing the above Order.