Fortress Biotech, Inc.
Lead Plaintiff Deadline: 01/26/2021
SUMMARY OF CASE:
A securities class action has been filed against Fortress Biotech, Inc. (FBIO) on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Fortress securities between December 11, 2019 through October 9, 2020. This case has been filed in the USDC – E.D.N.Y.
Fortress develops and commercializes pharmaceutical and biotechnology products. In December 2019, the Company’s majority-controlled subsidiary, Avenue Therapeutics, Inc. (“Avenue”), which Fortress founded in 2015, submitted a New Drug Application (“NDA”) for its intravenous (“IV”) Tramadol product to the U.S. Food and Drug Administration (“FDA”) for the management of moderate to moderately severe pain in adults in a medically supervised health care setting.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) IV Tramadol was not safe for the intended patient population; (ii) as a result, it was foreseeable that the FDA would not approve the NDA for IV Tramadol; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On October 12, 2020, Avenue disclosed receipt of a Complete Response Letter (“CRL”) from the FDA regarding the NDA for its IV Tramadol product. Specifically, the FDA advised Avenue that “it cannot approve the application in its present form” because “IV tramadol, intended to treat patients in acute pain who require an opioid, is not safe for the intended patient population.” Specifically, the CRL stated: “[I]f a patient requires an analgesic between the first dose of IV tramadol and the onset of analgesia, a rescue analgesic would be needed. The likely choice would be another opioid, which would result in opioid ‘stacking’ and increase the likelihood of opioid-related adverse effects.”
On this news, Fortress’s stock price fell $1.00 per share, or 23.98%, to close at $3.17 per share on October 12, 2020.