Nuvelo Inc (NASDAQ: NUVO) Investor Securities Class Action Lawsuit 02/09/2007

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Company Name(s): 
Nuvelo
Case Name: 
Nuvelo Shareholder Class Action Lawsuit 02/09/2007
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: NUVO
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
02/09/2007
Class Period Begin: 
01/05/2006
Class Period End: 
12/08/2006
Court of Filing: 
U.S. District Court for the Northern District of California
Date Settled: 
06/20/2011
Settlement Amount: 
$8,916,666
Deadline to Participate in Settlement: 
07/22/2011
Settlement Notice: 
Settlement Proof: 
Summary: 

July 6, 2011 - The court approved the motion for attorneys’ fees and expenses.

June 20, 2011 - The court approved the settlement, entered the orders approving the plan of allocation, and dismissed the action with prejudice.

March 24, 2011 - The court preliminarily approved the settlement.

February 25, 2011 - Parties filed a stipulation of settlement.

August 17, 2009 - The court granted in part and denied in part the defendants' motion to dismiss.

March 24, 2009 - The defendants filed a motion to dismiss.

February 17, 2009 - The lead plaintiffs filed a corrected second amended complaint.

January 23, 2009 - The lead plaintiffs filed a second amended complaint

November 9, 2007 - The lead plaintiffs filed a consolidated complaint.

September 21, 2007 - The lead plaintiffs and lead counsel were appointed and all cases were consolidated.

August 16, 2007 - Lead plaintiff motions were filed.

August 14, 2007 - A lead plaintiff motion was filed.

August 8, 2007 - The case was transferred to the U.S. District Court for the Northern District of California.

April 10, 2007 - Lead plaintiff motions were filed.

February 16, 2007 - Another investor filed a complaint.

February 9, 2007 - An investor in shares of Nuvelo Inc (NASDAQ: NUVO) filed a lawsuit in the U.S. District Court for the Southern District of New York against Nuvelo Inc over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between January 5, 2006 and December 8, 2006.

The complaint charges Nuvelo Inc and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Nuvelo Inc is a biopharmaceutical company engaged in the development and commercialization of acute cardiovascular and cancer therapies.

Specifically, the complaint alleges that Nuvelo Inc misrepresented its chances of obtaining Food and Drug Administration (”FDA”) approval of a purported new blood clot dissolver, alfimeprase. The complaint alleges that despite the fact that 80% of Nuvelo Inc’s value was attributed to this drug, Nuvelo Inc’s top officers concealed that their own clinical data demonstrated alfimeprase was ineffective in dissolving blood clots.

The complaint alleges that on or around December 14, 2005, Nuvelo Inc announced it had received a Special Protocol Assessment (”SPA”) agreement from the FDA, claiming that the SPA would solidify the regulatory pathway to approval for alfimeprase. Nuvelo Inc also stated their “power calculations” demonstrated alfimeprase’s efficacy as a drug candidate. During a January 5, 2006 conference call, Nuvelo Inc confirmed they believed alfimeprase would reach the U.S. consumer market by 2008 and that alfimeprase would generate $500 million in annual sales in the U.S. alone. The complaint alleges Nuvelo Inc’s stock (NASDAQ: NUVO) price surged on this news and remained inflated while Nuvelo Inc issued and sold 7.5 million shares of its common stock in an underwritten offering on January 30, 2006, receiving over $119 million in proceeds.

Then on December 11, 2006, Nuvelo Inc disclosed that alfimeprase had completely failed its clinical trials. During the conference call following the announcement, Nuvelo Inc’s CEO admitted that alfimeprase failed to perform better than placebos and that previously reported positive results were due to drug injections washing clots away rather than dissolving them. On this news Nuvelo Inc's stock (NASDAQ: NUVO) fell 80%, erasing over $800 million in market capitalization.

According to the complaint, the true facts, which were known by each of the defendants but concealed from the investing public between January 5, 2006 and December 8, 2006, were that: (i) Nuvelo Inc had no reliable clinical data suggesting that alfimeprase “dissolved” blood clots when applied to them through a catheter, other than physically washing them away; (ii) Nuvelo Inc had no “power calculations” suggesting alfimeprase would out-perform a placebo as required to demonstrate the efficacy the FDA would demand; and (iii) defendants knew the decision of Amgen, the drug’s original developer, to walk away in December 2004 was based on Amgen’s educated suspicion (based on clinical data also known to defendants) that alfimeprase would likely not pass FDA muster and thus was not a commercially viable drug candidate.