Cell Therapeutics, Inc Investor Lawsuit
March 16, 2012 (Update) -- According to the Notice of proposed settlement:
Statement of Lead Plaintiffs’ Recovery – The proposed Settlement with Defendants creates a fund in the amount of $19,000,000 in cash, which will include interest that accrues prior to distribution (the “Settlement Fund”). Based on Lead Counsel’s estimate of the number of shares of stock that may have been damaged by the alleged fraud, and assuming that all those shares participate in the Settlement, Lead Plaintiffs estimate that the average recovery would be approximately $0.0475 per share. Your recovery from this fund, however, will depend on a number of variables, including the number of shares of CTI common stock you purchased during the Class Period, the timing of your purchases and any sales, the number and amount of claims actually filed, and the estimate of recoverable losses based on the analysis of Lead Plaintiffs’ damages consultant. You are advised to review the Plan of Allocation set forth on pages 5 to 7 below in the Notice, which provides the actual formulas that will be applied to claims submitted by each eligible individual, corporation, partnership, limited partnership, association, joint stock company, joint venture, limited liability company, professional corporation, estate, legal representative, heir, trust, unincorporated association, government or any political subdivision or agency thereof, and any business or legal entity, and their predecessors, successors, representatives, or assignees (“Person”) who falls within the definition of the Class (“Class Member”). This estimate above is also before deduction of any Court-awarded expenses, such as attorneys’ fees and out-of-pocket expenses, and the cost of sending this Notice and administering the distribution of the settlement proceeds.
Reasons for Settlement – Lead Plaintiffs believe that the proposed settlement with Defendants is an excellent recovery and is in the best interests of the Class. Because of the risks associated with continuing to litigate and proceeding to trial, there was a danger that the Class would not have prevailed on their claims against Defendants, in which case the Class would receive nothing from Defendants. The amount of damages recoverable by the Class was and is challenged by Defendants. Recoverable damages in this case are limited to losses caused by conduct actionable under applicable law and, had the Action gone to trial, Defendants would have asserted that all or most of the losses of Class Members were caused by non-actionable conduct or market, industry, or general economic factors. Defendants would also assert, among other things, that their conduct complied with all applicable legal standards and that they did not act with the required state of mind to be liable for any violations of the federal securities laws.
February 14, 2012 (Update) -- According to a court filing Cell Therapeutics agreed to pay $19 million to settle the lawsuit filed by investors who alleged CTIC shares were artificially inflated due to allegedly misleading statements about a pipeline drug. The plaintiffs asked the judge to certify the class for settlement purposes as well as preliminary approval of the settlement in an unopposed motion. The settlement still needs court approval and if approved will mark an end of the lawsuit.
March 12, 2010 -- According to the complaint the plaintiff alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company’s business and prospects. Specifically, the complaint alleges that defendants failed to disclose: (a) that the Special Protocol Assessment (“SPA”) with the United States Food and Drug Administration (“FDA”) for pixantrone was invalidated in March 2008; (b) that the Company’s pixantrone study enrolled a large number of patients who did not suffer from aggressive non-Hodgkin’s lymphoma; (c) that the Company’s pixantrone drug was cardiotoxic; and (d) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about pixantrone and its prospects.
On February 8, 2010, the FDA posted its assessment of pixantrone in advance of its February 10, 2010 advisory meeting. With regard to the regulatory history of pixantrone, the FDA Briefing Document stated, among other things, that the Company’s SPA was invalidated in March 2008 and that the Company’s pixantrone study results were not meeting the FDA’s standards for approval.
Cell Therapeutics, Inc. shares (CTIC) split in 2008 and traded recently at $0.997 per share, down from its 52weekHigh of $2.23 per share. CTIC reached an unbelievable $2940 per share during the dotcom bubble in 2000, and continued to fall to approximately $1000 per share in 2001 with an additional substantial decline in 2002 from $1000 to $300 per share. Since 2002 CTIC has lost ground a traded before the financial crisis in 2008 under $5 per share.