Pomerantz Appointed Co-Lead Counsel in Neovasc Securities Litigation
On January 26, 2021, U.S. District Judge Philip M. Halpern of the Southern District of New York appointed Pomerantz LLP as Co-Lead Counsel on behalf of Lead Plaintiff Pratap Golla in In re Neovasc Inc. Securities Litigation, 20-cv-9313 (S.D.N.Y.), a securities litigation being pursued on behalf of a class of defrauded investors concerning allegations that Neovasc Inc. (“Neovasc” or the “Company”) failed to disclose that the Company had misrepresented the viability of getting approval for its Reducer medical device from the U.S. Food and Drug Administration (“FDA”) based on inadequate testing procedures and data.
Neovasc is a specialty medical device company that develops, manufactures, and markets products for cardiovascular diseases, including the Tiara technology and the Reducer. The Company’s Reducer is a medical device that treats refractory angina by altering blood flow in the heart’s circulatory system.
The complaint alleges that, between October 10, 2018 and October 27, 2020, Defendants failed to disclose that: (i) Neovasc had overstated the viability of U.S. approval of the Reducer based on its “Breakthrough Device Designation” and prior studies supporting the Reducer’s efficacy and safety; (ii) the results of Neovasc’s clinical studies used to support approval for the Reducer in the U.S. contained imbalances in missing information present in the control group versus the treatment group, including significant missing information for secondary endpoints but none for the primary endpoint; (iii) the imbalance in missing information indicated that control subjects were aware of their treatment assignment (not blinded) and less inclined to participate in additional data collection; (iv) blinding is critical when studying a placebo-responsive condition such as angina; (v) the lack of blinding assessment made the primary endpoint difficult to interpret; (vi) as a result of the foregoing, the FDA was reasonably likely to require additional premarket clinical data; (vii) as a result, the Company’s PMA for Reducer was unlikely to be approved without additional clinical data; and (viii) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
In December 2018, the Company filed a Q-Sub submission to the FDA that contained safety and efficacy results from Neovasc’s clinical studies and supporting data from peer-reviewed journals.
On February 20, 2019, Neovasc announced that, despite “Breakthrough Device Designation,” the FDA review team recommended that the Company collect further pre-market blinded data prior to submitting a Pre-Market Approval (“PMA”) application.
On November 1, 2019, the Company announced that it would submit a PMA application for the Reducer without gathering further evidence, against the FDA’s recommendation. Neovasc claimed that “the clinical evidence already available will be sufficient to not further delay the availability of this Breakthrough medical device for the treatment of U.S. patients.”
On October 28, 2020, before the market opened, the Neovasc announced that an FDA advisory panel voted overwhelmingly against the safety and effectiveness of the Reducer. The panel noted concerns with the Company’s clinical data, including “that the lack of blinding assessment made the primary endpoint difficult to interpret.” As a result, the panel reached a consensus “that additional premarket randomized clinical data was necessary.”
On this news, the Company’s share price fell $0.77 per share, or 42%, to close at $1.06 per share on October 28, 2020.