This securities class action alleges that executives at Northwest Biotherapeutics overstated or misstated results from ongoing clinical trials of certain therapies and engaged in an undisclosed stock promotion campaign to artificially inflate the company's stock price.
What investors are part of this class action? The class period is currently defined as all persons and entities who purchased the securities of Northwest Biotherapeutics from March 8, 2013 to August 20, 2015, inclusive (the "Class Period"). Northwest Biotherapeutics trades on the NASDAQ under the ticker symbol "NWBO."
Procedural Status: This lawsuit was filed on August 26, 2015 and is captioned Lerner v. Northwest Biotherapeutics, Inc. et al. It was filed in the United States District Court for the District of Maryland. Its civil docket number is 8:15cv02532. The lead plaintiff deadline is October 26, 2015
The complaint alleges that during the class period, the defendants engaged in a course of conduct through which they knowingly and fraudulently made untrue statements of material facts and omitted other material facts in connection with the purchase and sale of securities. The scheme was designed to deceive investors, artificially inflate the securities' market price and cause the plaintiff and others to purchase those securities, and constituted violations of Section 10(b) of the Exchange Act and its Rule 10b-5, Section 20(a) of the Act and also of Section 20(a) of the Act by defendant Linda Powers, the company's CEO, CFO and Principal Accounting Officer.
Specific assertions in support of the plaintiffs claims include:
- the company touted initial "positive responses" of patients at MD Anderson Cancer Center to its DCVax-Direct treatment, despite the fact that such claims were based on incomplete, early-stage trial case report forms that had not yet been analyzed by participating doctors,
- the use of this data prompted MD Anderson Cancer Center to issue a statement condemning the company for using such preliminary patient information to make unsubstantiated promotional claims in the public arena,
- the company embarked on an aggressive stock promotion campaign involving promoters who used false identities and credentials in the areas of healthcare and finance, and
- German regulators insisted that the company provide additional information before they would allow the DCVax-L brain cancer treatment trial to continue at certain facilities uninterrupted.
Each of these events transpired without earning any mention in the multiple required Form 10-K and 8-K disclosures filed with the Securities and Exchange Commission during the relevant period.
Once the news became public the MD Anderson officials had rebuked Northwest Bioptherapuetics' use of such bare-bones data, the company's securities declined $1.79 per share, or roughly 20%, closing at $7.18 per share on June 19, 2014. On July 7, 2014, a published report describing Northwest's use of questionable promoters to boost stock prices caused shares to decline by $0.43, closing at $6.71 on that same day. On August 21, 2015, news broke of the temporary suspension by German regulators of the Phase 3 DCVax-L trial, resulting in a $1.92 per share decline in company securities, with shares closing at $6.96 by day's end.Article Type: Lawsuit