According to the law firm press release, CTI is a biopharmaceutical company which provides medical research services, and develops clinical treatment and drugs for various cancers. One of the Company’s most advanced pipeline products was pacritinib, a treatment for myleofibrosis.
On February 8, 2016, pre-market, CTI disclosed that it had been alerted by the U.S. Food and Drug Administration (FDA) that the FDA had placed a partial hold on clinical studies of CTI's primary product, pacritinib. The FDA has recommended that CTI amend its procedures for randomized studies to disallow crossover to pacritinib, provide specific notifications, adjust certain statements in both the investigator's brochure and informed consent documents and other actions. Upon this news, CTI stock fell $0.68 per share, or over 60%, to close at $0.44 on February 8, 2016, on unusually heavy volume.
On February 9, 2016, the Company issued a press release announcing that the FDA had placed a full clinical hold on pacritinib, and required that all patients currently on pacritinib must discontinue pacritinib immediately. The Company further reported that it had withdrawn the new drug application for pacritinib. On this news the Company’s shares fell 40%, or $0.20 per share, on February 10, 2016, on unusually heavy volume of over 15 million shares.
The complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose: (1) the detrimental effect on survival of pacritinib; (2) that the Company’s clinical trials demonstrated deaths associated with pacritinib usage; (3) that the Company’s new drug application for pacritinib would likely be withdrawn; (4) that, as such, the Company’s future revenues were impaired; (5) that the company lacked adequate internal controls; and (6) that, as a result of the foregoing, the Company’s financial statements and Defendants’ statements about CTI Biopharma’s business, operations, and prospects, were materially false and misleading at all relevant times.
On May 19, 2016, this case was transferred to the Western District of Washington. Then on June 13, the transferred case was consolidated into lead case 16-CV-00216.
On September 2, 2016, the Court issued an Order appointing Lead Plaintiff and Counsel.
A consolidated complaint was filed on November 8, 2016.