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Cellceutix (CTIX) Securities Fraud Class Action Lawsuit

This federal securities fraud class action is brought against Cellceutix, a clinical stage biotechnology company, and certain of its officers and directors for violations of federal securities laws.  The complaint alleges that defendants knowingly made materially false and misleading statements as well as failed to disclose material adverse facts about the Company’s business, operational, and financial performance.

Who Is Affected?

This federal securities fraud class action is brought on behalf of a class consisting of all persons who purchased or otherwise acquired Cellceutix securities between May 10, 2013 and August 6, 2015, both dates inclusive.  Cellceutix is a clinical stage biotechnology company that engages in the development of treatments of cancerous and degenerative diseases.  Cellceutix is incorporated in Nevada with its principal place of business located in Beverly, Massachusetts.  Its common stock trades on the OTC Pink marketplace under ticker symbol “CTIX.”

Procedural History

The lawsuit was filed on September 11, 2015 and is captioned O'Connell et al. v. Cellceutix Corporation et al.  It was filed in the New York Southern District Court.  Its civil docket number is 1:15cv07194.  The class period runs from May 10, 2013 through August 6, 2015, inclusive.  The lead plaintiff deadline is November 10, 2015.

Cellceutix is focused on discovering small molecule therapy drugs for hard to treat diseases with significant medical need, including drug-resistant cancers, psoriasis, autism and inflammatory disease.

  1. Brilacidin is not effective.

Brilacidin is a drug owned by Cellceutix, which is currently undergoing clinical studies in order to treat and kill bacterial infections.  In September 2013, Cellceutix announced the purchase of Brilacidin from PolyMedix, Inc. and touted the efficacy of Brilacidin in combating acute bacterial skin and skin structure infections, stating:

“The acquisition includes PolyMedix’s flagship drug candidate Brilacidin, a first-in-class defensin-mimetic antibiotic that has completed a Phase 2a clinical trial demonstrating safety, tolerability and efficacy in patients with acute bacterial skin and skin structure infections caused by Staphylococcus aureus.”

Similarly, in April 2015, Cellceutix displayed a posted at the 2015 European Congress of Clinical Microbiology and Infectious Diseases in Copenhagen, which touted Brilacidin’s ability to kill bacteria such as Staphylococcus aures and E.Coli.

 2.  Kevetrin does not activate the p-53 gene, which is a tumor suppressor.

Kevetrin is a drug owned by Cellceutix, which is currently undergoing clinical studies in order to treat cancer.  In January 2015, Cellceutix issued a press release reporting the near complete disappearance of a lesion in the spleen of a Stage 4 ovarian cancer patient who was enrolled in the company’s Phase 1 clinical trial of anti-drug Kevetrin.  Cellceutix touted Kevetrin’s ability to activate the p-53 gene, which suppresses cancer tumors.

“In nearly all cancers, p53 is deficient or mutated , thus failing to perform its role as a master cell regulator, which exacerbates tumor progression and metastasis…Kevetrin is having an impact on returning p53 to its effectiveness as a tumor suppressor.”

Similarly, in May 2015, Cellceutix presented a poster at the 2015 American Society of Clinical Oncology Annual Meeting in Chicago, which touted Kevetrin’s anti-tumor activity: “Kevetin was shown to activate wild type p53 and degrade mutant p53.”

  3.   Defendant Krishna Menon, a co-founder, President and Director of the company, did not earn his PhD from Harvard University.

In May 2013, Future Woman magazine published a profile article on defendant Menon in which Menon confirmed earning his PhD in Pharmacology from Harvard University.

All of the foregoing statements were materially false and misleading because they misrepresented and failed to disclose these adverse facts pertaining to the company’s business, products, and directors’ backgrounds, which were known to Defendants or recklessly disregarded by them.

As a result of the foregoing, Cellceutix’s public statements were materially false and misleading at all relevant times.

Article Type: Lawsuit
Topic: Investments

Most Recent Case Event

Shareholder sues Cellceutix alleging a host of material nondisclosures

September 17, 2015

Here is the complaint.  It alleges a series of fundamental nondisclosures (highlighted above).  The complaint will be amended once the court establishes the leadership structure.

cellceutix_complaint.pdf

Case Event History

Shareholder sues Cellceutix alleging a host of material nondisclosures

September 17, 2015

Here is the complaint.  It alleges a series of fundamental nondisclosures (highlighted above).  The complaint will be amended once the court establishes the leadership structure.

cellceutix_complaint.pdf
Tags: Management Lies On Resume, Overstating Clinical Trial Results, Securities Frauds, Stock Losses, Your Money