Aveo Pharmaceuticals, Inc. and several of its executives have been targeted in a securities class action filed in a federal court in Massachusetts; named plaintiff Paul Sanders alleges that he and others purchased Aveo securities between January 3, 2012, and May 1, 2013, relying on misleading company statements about the progress of its kidney cancer drug through clinical trials.
Sanders v. Aveo Pharms., Inc., No. 13-11157 (U.S. Dist. Ct., D. Mass., filed May 9, 2013). Ultimately, the Food and Drug Administration’s (FDA’s) Oncologic Drugs Advisory Committee voted not to recommend approval of tivozanib, allegedly because “the application for investigational agent tivozanib did not demonstrate a favorable benefit-to-risk evaluation for the treatment of advanced renal cell carcinoma (RCC) in an adequate and well-controlled trial.”
The complaint details how company statements were purportedly misleading for failing to disclose that FDA had recommended to the company that it conduct an additional phase 3 trial and for making untrue statements about the product’s overall safety and efficacy. The plaintiff contends that the statutory safe harbor for forward-looking statements “does not apply to any of the allegedly false statements pleaded,” because they were not identified as forward-looking statements when made and lacked meaningful cautionary statements. The plaintiff also claims, in the alternative, that even if the safe harbor does apply to any forward-looking statements, the defendants are liable because they knew the statements were false.
Seeking to certify a class of all who purchased Aveo securities during the relevant time period, the plaintiff alleges violations of sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5. He seeks damages, interest, attorney’s fees, and costs.