According to the law firm press release, Intercept is a pharmaceutical company that has been developing and trying to bring to market new clinical drugs. The Company’s primary drug compound, known as obeticholic acid (“OCA”), is in various phases of clinical development, primarily for the purpose of treating chronic liver diseases, including non-alcoholic steatohepatitis (“NASH”).
The complaint alleges on January 9, 2014 and January 10, 2014, Intercept announced that its Phase 2 trial of OCA for the treatment of NASH had been stopped early for efficacy based on an interim analysis that showed that the efficacy endpoint of the trial had been met. As a result of the Company’s announcements, the Company’s stock price skyrocketed from a January 8, 2014 close of $72.39 per share to a January 10, 2014 close of $445.83 per share.
Then, on Friday, January 10, 2014, after the markets closed, the National Institutes of Health’s (“NIH”) National Institute of Diabetes and Digestive and Kidney Diseases issued a press release stating that while the efficacy primary endpoint for OCA in the Phase 2 study had already been met, participants in the study who received the drug suffered disproportionate levels of lipid abnormalities. The complaint alleges that, as a result of the NIH’s January 10, 2014 disclosure of OCA’s safety risks, Intercept’s stock price dropped over $81 per share – a decline of 18.2% – from $445.83 to $364.36 per share on Monday, January 13, 2014, and continued to fall on January 14, 2014 to a close of $255.12 per share, as investors continued to digest and react to this negative news.
On May 15, 2014, the Court issued an Order consolidating cases, appointing lead plaintiff, and approving the selection of lead counsel. Lead Plaintiff filed a consolidated complaint on June 27.
On May 2, 2016, the parties filed a Stipulation of Settlement. This Settlement was preliminarily approved by the Court on May 23.