Helius Medical Technologies, Inc. (HSDT) Accused of Misleading Shareholders
According to the filed complaint for alleged violations of the Securities Exchange Act of 1934 between November 9, 2017 and April 10, 2019, on November 2017, Helius Medical Technologies, Inc. (HSDT) touted statistically significant positive results from its clinical trial evaluating the efficacy of its Portable Neuromodulation Stimulator (“PoNS”) for traumatic brain injury, which prompted Helius’ submission for de novo classification and 510(k) clearance with the FDA. Despite the alleged positive trial results, in January 2019, Helius announced that the FDA had requested additional information, but assured investors that it had the data to address the FDA’s questions. Helius’ positive assurances were materially false and misleading as they failed to disclose that the clinical study did not actually produce statistically significant results to support PoNS’ efficacy in the treatment and therefore Helius lacked sufficient data to support regulatory clearance and approval of PoNS. The truth was finally revealed in April 2019, when Helius disclosed that the FDA had denied clearance of PoNS due to insufficient data supporting its efficacy. On this news, Helius’ share price fell $4.11, more than 66%, to close at $2.10, and has yet to recover.