On May 1, 2017 Pomerantz LLP was appointed Co-Lead Counsel in a class action lawsuit filed against Egalet Corporation (“Egalet” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Eastern District of Pennsylvania, is on behalf of a class consisting of investors who purchased or otherwise acquired Egalet securities, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
Egalet is a specialty pharmaceutical company developing, manufacturing and commercializing innovative treatments for pain and other conditions. Egalet revolves around a proprietary technology called Guardian Technology (“Guardian”) which Egalet broadly applies for different classes of pharmaceuticals products. Particularly, Egalet uses Guardian for its lead product ARYMO ER, an abuse deterrent oral morphine formulation for the management of severe pain requiring daily “around-the-clock” long-term opioid treatment.
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Egalet misrepresented ARYMO ER’s oral abuse-deterrent profile; (ii) Egalet falsely or misleadingly overstated ARYMO ER’s chances to receive the oral abuse-deterrent labeling; (iii) the Company’s New Drug Application for ARYMO ER lacked sufficient data to support the oral-labeling claims; (iv) the label was likely not to include the oral abuse-deterrent claims; and (v) as a result of the foregoing, Egalet’s public statements were materially false and misleading at all relevant times.
On January 9, 2017, post-market, Egalet issued a press release, filed on Form 8-K with the SEC, entitled “Egalet Receives FDA Approval for ARYMO™ ER (morphine sulfate) C-II, an Extended-Release Morphine Product Formulated with Abuse-Deterrent Properties for Treatment of Chronic Pain,” announcing the approval of its product Arymo ER. The press release advised investors that the FDA had only granted an intravenous abuse-deterrent label claim and did not approve the oral abuse-deterrent labeling as requested by the Company.
On this news, Egalet’s share price declined $1.86, or 22.2%, to close at $6.52 per share on January 10, 2017.