Allos Therapeutics Inc. Case 05/19/2004
A press release dated August 18, 2008 announced that Allos Therapeutics Inc. has reached a $2 million settlement in a securities class action lawsuit filed in Colorado against the company and one of its former officers. In October 2006, the parties held talks to settle the matter, and on Feb. 6, 2008, they signed a stipulation of settlement, resolving the case for $2,000,000. The Court of Appeals accordingly has remanded the case to the District Court for consideration of the settlement. The settlement is subject to various conditions, including without limitation, approval of the District Court.
According to the latest docket posted, on November 17, 2005, the plaintiff filed a notice of appeal from the October 20, 2005 Memorandum and Opinion dismissing the complaint. The appeal is currently pending in the Tenth Circuit U.S. Court of Appeals.
In a press release dated October 21, 2005, Allos Therapeutics, Inc. announced that the only remaining securities class action lawsuit that had been brought against the company and one of its officers in May 2004 has been dismissed with prejudice. In an opinion dated October 20, 2005, the United States District Court for the District of Colorado concluded that the plaintiff's complaint failed to meet the legal pleading requirements applicable to its alleged claims. The plaintiff has 30 days to determine whether it will appeal the decision to the U.S. Court of Appeals for the Tenth Circuit.
According to the docket for the class action complaint filed on May 19, 2004, Civil Action 04-CV-01026, the U.S. District Court Judge Richard P. Matsch denied the defendants’ motion to consolidate related securities actions. By the Order, dated August 5, 2004, the case was dismissed without prejudice. The case continued in Civil Action 04-CV-01030.
Several purported class action complaints have been filed alleging that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically the complaint alleges that Allos misled the investing public by issuing a series of materially false and misleading statements highlighting the purported efficacy of the Company's radiation sensitizer RSR13 ("Efaproxiral") for the treatment of brain metastases in patients with breast cancer, as well as the likelihood that this drug would receive approval from the U.S. Food and Drug Administration ("FDA"). On April 30, 2004 and May 3, 2004, it was announced by the Oncologic Drugs Advisory Committee ("ODAC") of the FDA, that it concluded by a 16-1 vote, to recommend that the FDA not approve Efaproxiral. In recommending rejection of Efaproxiral, the ODAC found that "the evidence of drug efficacy needs to be much stronger to be convincing." As a result of this announcement, the price of Allos shares fell $2.09, or 45% to close at $2.55 on extraordinary volume.