Robbins LLP: Alcobra Ltd. (ADHD) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that an investor of Alcobra Ltd. (NASDAQGM: ADHD) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of New York. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between March 28, 2014 and November 14, 2014. Alcobra is a biopharmaceutical company focused on the development and commercialization of proprietary drug candidates to treat attention deficit hyperactivity disorder and other cognitive dysfunctions in adults.
Alcobra Is Accused of Misrepresenting MDX Phase III Study Results
According to the complaint, shares of Alcobra fell multiple times beginning with an initial decline of $7.99 per share, or nearly 57%, to close at $6.12 on October 6, 2014, after the company revealed results for its Phase III trial of MDX, a proprietary drug candidate for the treatment of adults with ADHD. Alcobra announced that MDX demonstrated a statistically significant improvement in those with ADHD symptoms. However, these favorable results were obtained only after the company conducted a post hoc exclusion of four subjects with “extremely large” placebo responses. Shortly thereafter, on October 23, 2014, Alcobra issued a press release stating that the Predominantly-Inattentive ADHD subtype alone did not produce a statistically significant outcome. On this news, shares of Alcobra fell 36%, or $2.05 per share, during a two-day decline to close at $3.63 on October 24, 2014. On November 17, 2014, Alcobra announced in a press release that it plans to meet with the U.S. Food and Drug Administration and launch a second adult Phase III study in 2015. The company also announced that it is working on changes to the design and monitoring of the second trial in hopes of controlling the high placebo response and variability observed in the first Phase III study. Following this announcement, shares fell 12%, or $.42 per share, during a two-day decline to close at $3.24 on November 18, 2014.
The complaint further alleges that Alcobra made false and/or misleading statements and failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, Alcobra failed to disclose: (i) that MDX did not show a statistical benefit over a placebo until patients were removed from the analysis of the Phase III study; (ii) that the company was presenting its analyses inconsistently; and (iii) that, as a result of the foregoing, statements about Alcobra’s business, operations, and prospects were misleading and/or lacked a reasonable basis.
Alcobra Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.