According to the Complaint, Prothena Corporation plc ("Prothena" or the "Company") is a development-stage biotechnology company. During the Class Period, Prothena’s principal asset was NEOD001, a monoclonal antibody designed to treat amyloid light chain amyloidosis (“AL amyloidosis”), a debilitating disease that can lead to organ failure and death. This matter arises from Defendants' alleged misrepresentations and material omissions regarding NEOD001’s clinical trial results and prospects for approval.
The Complaint alleges that throughout the Class Period, Defendants cited the “best response” results of Prothena’s ongoing Phase 1/2 clinical study of NEOD001 as evidence that the drug was effective, while withholding relevant trial data showing that NEOD001 was not an effective treatment for AL amyloidosis. The Complaint further alleges that Defendants made misleading comparisons of NEOD001’s “best response” rates against prior studies that measured sustained responses after a specified period of time, and falsely told investors that Prothena’s ongoing Phase 1/2 study provided a strong basis for late-stage Phase 2b and Phase 3 studies of NEOD001. In truth, the full Phase 1/2 study data demonstrated that NEOD001 was not an effective treatment for AL amyloidosis and did not provide an adequate basis for the late-stage Phase 2b and Phase 3 studies.
On April 23, 2018, before the market opened, Prothena stunned investors by announcing that it was ending all development of NEOD001 after data from its Phase 2b PRONTO trial showed that NEOD001 failed to reach either its primary or secondary endpoints, and was substantially less effective than a placebo. In response to this news, Prothena stock fell 69%.