This is a securities fraud class action lawsuit commenced on behalf of purchasers of Threshold Pharmaceuticals, Inc. common stock during the period between February 4, 2005 and July 14, 2006, including purchasers in Threshold's February 4, 2005 $37 million initial public offering ("IPO") and its October 12, 2005 $65 million follow-on offering. The complaint charges Threshold and certain of its officers and directors with violations of the Securities Exchange Act of 1934 and the Securities Act of 1933.
Threshold discovers, develops, and commercializes small molecule therapeutics based on "Metabolic Targeting." Threshold's lead product candidate for the treatment of symptomatic benign prostatic hyperplasia ("BPH") was TH-070, a drug which utilized Threshold's patented Metabolic Targeting process.
The class action complaint alleges that in preparation for the Threshold's February 2005 IPO, Threshold conducted a so-called "Phase II" study of TH-070 on 30 men at Bari University in Italy. Based on the purported success achieved in the Bari Phase II study, Threshold completed its $37 million IPO in February 2005, conducted additional clinical trials, filed a new drug application with the FDA in late 2005, and completed the $65 million follow-on offering in October 2005.
However, on May 11, 2006, Threshold were forced to disclose that the FDA had placed the TH-070 program on partial clinical hold as a result of abnormalities observed in liver enzyme levels in six subjects in ongoing clinical trials and had requested that Threshold provide additional information related to the drug's acceptable dose and duration of treatment in BPH patients. According to the class action complaint, while Threshold had known for years of TH-070's propensity to cause liver toxicity, the IPO and follow-on offering prospectuses concealed it.
On July 17, 2006, Threshold was forced to concede that TH-070 provided no benefit whatsoever in the alleviation of prostate enlargement and that Threshold planned to discontinue development of TH-070 for BPH altogether. The complaint alleges that as a result of the defendants' false and misleading statements issued during the Class Period, Threshold stock traded as high as $16.52 per share. After the Company's July 17, 2006 announcement, however, Threshold stock fell to $1.55 per share.
Name (Stock Symbol)
Threshold Pharmaceuticals, Inc. (THLD)
Threshold Pharmaceuticals, Inc. is a biotech company.
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