Robbins Arroyo LLP recently announced that the firm has filed a collective lawsuit against Inotek Pharmaceuticals Corp (NASDAQ:ITEK), on account of misleading shareholders. Robbins Arroyo LLP said that the class action lawsuit is filed in U.S. District Court for the District of Massachusetts. According to the law firm, the company has been sued collectively by the purchasers who bought Inotek securities from the time period of 23 July 2015 to 30 December 2016.
Robbins Arroyo LLP accused the company’s directors, officers and senior executives of misleading shareholders by violating Securities Exchange Act of 1934. The company is known for its commercial treatments (especially trabodenoson) in the form of glaucoma therapies, apart from other eye diseases in the U.S.
Doubt on product efficacy
The complaint stated in the court that the company had released an official PR on 23 July 2015, in which it claimed that the Phase 2 meeting of its trabodenoson trial with U.S. Food and Drug Administration went on a positive end. In the press release, according to the complaint, the company had also claimed that the company had finalized preparations for starting off the first Phase 3 trial in 4Q, with anticipation of data in 2016.
The class action lawsuit claims that the company had hyped the press release, thereby misleading its shareholders. The buzz around Phase 3 trabodenoson trial’s positive data had led to a dramatic increase in its share price, which went up to $15.37 per share on 23 July 2015.
Then again, in the month of March 2016, the complaint notes that Inotek Pharmaceuticals reported its operational highlights, mentioning in it, the financial, clinical and regulatory accomplishments, which want exactly true.
The shareholders allege failed endpoints results of clinical trial of trabodenoson
In the complaint, the shareholders alleged that company has made false claims about clinical trial of trabodenoson. According to them, it is most likely that the company officials were aware of the fact that major part of this trial would not be able to accomplish primary endpoint. The company had created the endpoint at statistical relevance for intraocular pressure reduction in contrast with placebo.