Pomerantz Appointed Lead Counsel in Provention Bio Securities Litigation
On November 17, 2021, U.S. District Judge Michael A. Shipp of the District of New Jersey appointed Pomerantz LLP as Lead Counsel on behalf of George L. Jordan, Jr., Lead Plaintiff in Paxton v. Provention Bio, Inc., 21-cv-11613 (D.N.J.), a securities action brought on behalf of a class of defrauded investors concerning allegations that Provention Bio, Inc. (“Provention” or the “Company”) had made false and misleading statements regarding the sufficiency of testing data and approval prospects for its lead product candidate for the treatment of type one diabetes (“T1D”).
Provention is a clinical stage biopharmaceutical company that develops and commercializes therapeutics and solutions to intercept and prevent immune-mediated diseases, including PRV-031 teplizumab (“teplizumab”) — their product candidate for the delay and prevention of T1D.
Allegations against Provention include that: (i) the Company’s Biologics License Application (“BLA”) to the FDA for teplizumab was deficient in its submitted form and would require additional data to secure approval; (ii) the teplizumab BLA lacked the evidentiary support that Provention had led investors to believe it possessed; and (iii) the Company had overstated the approval prospects for the teplizumab BLA and the commercialization timeline for teplizumab.
On November 5, 2020, Provention announced its third quarter 2020 financial results, including a statement that touted its November 2, 2020 submission of the teplizumab BLA as a major milestone. The Company also stated that it was focused on preparing for the potential approval of teplizumab and its product launch in mid-2021.
On January 4, 2021, Provention announced that the FDA had granted its request for Priority Review (an accelerated approval process) and assigned a user fee goal date of July 2, 2021 (the deadline for the FDA to complete its review). The Company further touted that the FDA’s acceptance of the teplizumab BLA was a significant achievement.
On February 25, 2021, Provention filed its annual report with the SEC in which it touted that the filing of the teplizumab BLA was a “momentous achievement.” The Company further asserted that they were preparing for the potential commercial launch of teplizumab in the second half of 2021.
On March 3, 2021, Provention announced that it was publishing follow-up data from its teplizumab clinical trials, touting that the results had “embolden[ed]” its “enthusiasm” for the potential impact that teplizumab could make in the treatment of T1D.
The truth emerged on April 8, 2021, when Provention announced that the FDA had identified deficiencies in the teplizumab BLA related to the comparability of the drugs used in the clinical trials. As a result, the FDA would require additional data before it could consider approval. On this news, Provention’s share price fell $1.73 per share, or 17.8%, to close at $8 per share on April 9, 2021.