Johnson & Weaver, LLP filed a derivative lawsuit seeking to hold certain officers and directors of ARIAD Pharmaceuticals, Inc. (Nasdaq: ARIA) responsible for the damage they caused the company to suffer. Specifically, the complaint alleges that these individuals breached their fiduciary duties and violated other laws related to their representations about the safety and commercial viability of ARIAD’s leukemia drug Iclusig. As a result, ARIAD’s credibility and goodwill have been damaged, ARIAD’s market capitalization has been substantially damaged, and ARIAD is now the subject of a securities fraud class action and will likely incur substantial costs in investigating and litigating that action.
On October 9, 2013, ARIAD published data from an ongoing clinical trial for Iclusig and announced that patient enrollment in all then-ongoing clinical studies of Iclusig was being paused. Then, on October 11, 2013, the U.S. Food and Drug Administration published a “Safety Announcement,” entitled “FDA Drug Safety Communication: FDA investigating leukemia drug Iclusig (ponatinib) after increased reports of serious blood clots in arteries and veins.”
A week later, on October 18, 2013, ARIAD announced that it was discontinuing its phase 3 “EPIC” Iclusig trial, stating that “ARIAD and the U.S. Food and Drug Administration mutually agreed that the trial should be terminated because arterial thrombotic events were observed in patients treated with Iclusig. This decision was made in the interest of patient safety based on a recent assessment of data in the clinical trial.” Thereafter, on October 31, 2013, ARIAD announced that it was temporarily suspending the marketing and commercial distribution of Iclusig in the United States.
From October 9, 2013 through the close of the markets on October 31, 2013, ARIAD shares were down over 87%.
The shareholder derivative lawsuit filed by Johnson & Weaver alleges that the company was damaged and that ARIAD’s shareholders were previously misled by ARIAD officers or directors through misleading or inadequate disclosures regarding Iclusig’s safety and commercial viability.