Robbins Umeda LLP
today announced that a class action has been commenced in the U.S. District Court for the Central District of California, Western Division (the "Court") on behalf of purchasers of AspenBio Pharma, Inc. ("AspenBio" or the "Company") (NASDAQ: APPY) common stock during the period between February 22, 2007 and July 19, 2010 (the "Class Period").
AspenBio is a bio-pharmaceutical company that engages in the discovery, development, and commercialization of products that address unmet diagnostic and therapeutic needs. The Company's research and development focus mainly on a human appendicitis blood based test and a bovine single-chain recombinant reproduction enhancement drug. The Company's lead product, AppyScore, is, according to the Company, a rapid blood-based diagnostic test to assist physicians in the diagnosis of acute appendicitis in the hospital emergency department setting. The Company was founded in 2000 and is headquartered in Castle Rock, Colorado.
The complaint alleges that AspenBio and certain of its officers issued materially false and misleading statements during the Class Period about the effectiveness of AppyScore and failed to acknowledge that AppyScore could not differentiate between appendicitis and other medical conditions.
During 2007, AspenBio released multiple press releases announcing the clinical results from the ongoing research of AppyScore, which would purportedly aid emergency room staff in the diagnosis of appendicitis in humans. In November 2007, AspenBio announced that it would pursue a 501(k) regulatory clearance from the U.S. Food and Drug Administration ("FDA") for AppyScore, and expected to receive clearance before the end of 2008. Throughout 2009, via public press releases and U.S. Securities and Exchange Commission filings, AspenBio continued to advertise the effectiveness and high sensitivity of AppyScore to detecting patients with a wide spectrum of different severities of appendicitis. Following these and related statements, the price of AspenBio stock rose substantially.
Then, on June 7, 2010, the Company disclosed there was "unexplained variability" in the test results of its most recent clinical trial for AppyScore. Furthermore, on July 19, 2010, AspenBio reported the results from its clinical trial, and announced that AppyScore possessed considerably lower specificity of identifying appendicitis than predicted. As a result of these disclosures, the Company's stock declined approximately 29% from its close price of $0.97 on July 19, 2010, to close at $0.69 per share on July 20, 2010.