Genocea Accused of Misleading Shareholders Regarding its Clinical Trials
According to a complaint filed on December 15, 2017, Genocea’s (NasdaqGM: GNCA) genital herpes immunotherapy product GEN-003 was the company’s lead product candidate until September 26, 2017. Prior to this date, Genocea touted the viability of GEN-003, calling it the “first-ever therapeutic vaccine for a chronic infection and the first advance in the treatment of genital herpes in more than 20 years,” and repeatedly stated that GEN-003’s phase 3 trial was to commence in the fourth quarter of 2017. Genocea also continually assured the investing public that the company had the funds “sufficient to support operating expenses, capital expenditures requirements, and debt obligations into the first quarter 2018,” and as late as May 5, 2017, stated it had the “ability to modify its operating plans in order to fund operations through at least one year from the issue of this quarterly report.” However, contrary to these statements, on September 25, 2017, Genocea announced that it was ceasing GEN-003 spending and activities and reducing its workforce by approximately 40 percent. On this news, Genocea’s stock fell over $4.00 per share, or nearly 76.5%, to close at $1.25 per share on September 26, 2017.