Neuroscience Company Facing Securities Suit After Allegedly Misleading Investors on FDA Trials

Minerva Neuroscience is facing a putative class-action securities lawsuit filed by an investor in Massachusetts District Court. According to the complaint, the NASDAQ-listed company is a “clinical-stage biopharmaceutical company focused on the development and commercialization of a portfolio of product candidates to treat patients suffering from central nervous diseases.” The complaint alleges that misleading statements made by the company and its CEO concerning the outcomes of Food and Drug Administration (FDA) trials resulted in a decrease in stock price.

At the center of the suit is roluperidone, or MIN-101, a drug being developed for the treatment of symptoms of schizophrenia. The complaint explained that the Class Period began in May 2017, when the defendant announced that it had held a successful Phase 2b trial with the FDA, and would undertake a Phase 3 trial.

The plaintiff alleged that the company and its CEO made false or misleading statements regarding the trial, including hiding the nature of FDA feedback after Phase 2b, misleading the class as to how the Phase 2b test was conducted, and failing to disclose “that the failure of the Phase 3 study to meet its primary and key secondary endpoints rendered that study incapable of supporting substantial evidence of effectiveness.” The plaintiffs alleged that these undisclosed issues seriously impacted the likelihood that the results of Phase 3 testing would support the submission of a New Drug Application.

On December 1, the complaint alleged, the defendant revealed in a press release that it had received meeting notes from the FDA noting issues with Phase 2b and Phase 3 testing, disclosing these issues for the first time. The complaint said that this caused Minerva’s stock price to drop by 25.7%, down to $2.89 per share.

The complaint alleged violations of sections 10(b) and 20(a) of the Securities Exchange Act. The plaintiffs are represented by Andrews DeValerio, Pomerantz, and Bronstein, Gewirtz, & Grossman.