According to the law firm press release, Celgene is a biotechnology company that specializes in the discovery, development and commercialization of therapies for the treatment of cancer and inflammatory diseases. Its most successful drug is Revlimid, a drug for the treatment of multiple myeloma (a type of plasma cell cancer). However, Revlimid will lose its patent exclusivity in the coming years, at which point cheaper generics will be able to enter the market. As a result, it was important that the Company develop and successfully commercialize new drugs to diversify and ultimately replace its reliance on revenues from Revlimid sales, with the three most promising replacements being GED-0301, a late-stage developmental treatment for Crohn’s disease, Otezla, a commercial-stage treatment for psoriasis, and Ozanimod, a developmental treatment for relapsing multiple sclerosis and ulcerative colitis.
The Complaint alleges that during the Class Period, Defendants made false and misleading statements and/or failed to disclose adverse information regarding Celgene’s business and the prospects for its drug products. Specifically, the Complaint alleges that Defendants failed to disclose that trials for GED-0301 suffered from fatal design defects, such that GED-0301 had failed to demonstrate meaningful clinical efficacy, and that, as a result, there was an undisclosed risk and high likelihood that Celgene would be unable to develop GED-0301 into a commercially viable treatment for Crohn’s disease. In addition, Defendants also failed to disclose that the growth of Otezla sales had dramatically slowed during Celgene’s third fiscal quarter of 2017 and that the clinical and nonclinical pharmacology data in Celgene’s new drug application (“NDA”) for Ozanimod were insufficient to permit a complete review by the FDA, which resulted in the FDA issuing a refusal to file letter to Celgene regarding the NDA. As a result of these false statements and/or omissions, the price of Celgene stock was artificially inflated during the Class Period.