Orphazyme A/S (ORPH) Misstated the Efficacy of its Drug Arimoclomal in its IPO Offering Documents
Orphazyme held a public offering in September 2020 based on negligently prepared offering documents. Specifically, defendants made false and/or misleading statements and/ failed to disclose that: (i) arimoclomal was not as effective in treating Amyotrophic Lateral Sclerosis (“ALS”) or Inclusion Body Myositis (“IBM”) as the Company asserted; (ii) the arimoclomal new drug application (“NDA”) for Niemann-Pick disease type C (“NPC”) was incomplete or required additional evidence and data to support the benefit-risk assessment of that NDA; and (iii) as result, the FDA was unlikely to approve the arimoclomol NDA for NPC in its present form.
On March 29, 2021, Orphazyme announced “its phase 2/3 trial evaluating arimoclomal for the treat of [IBM] … did not meet its primary and secondary endpoints.” On this news, the Company’s ADS price fell $3.59, almost 29%, to close at $8.80 on March 29, 2021. On May 7, 2021, Orphazyme disclosed that its “pivotal trial [of ALS] … did not meet its preliminary and secondary endpoints to show benefit in people living with ALS.” On this news, the Company’s ADS price fell $2.81, or almost 33%, to close at $5.57 on May 7, 2021.
Then, on June 18, 2021, Orphazyme issued a press release announcing receipt of a Complete Response Letter (“CRL”) from the FDA following the agency’s review of the NDA for arimoclomol for the treatment of NPC. On this news, Orphazyme’s ADS price fell $7.23 per ADS, or 49.66%, to close at $7.33 on June 18, 2021. Finally, on June 21, 2021, Seeking Alpha reported that “Orphazyme [was] cut to sell at Guggenheim after [the Company’s] regulatory snub” by the FDA, stating, among other things, that “[w]ith a $1.00 price target for the stock indicating a downside of ~86.4%, Guggenheim notes that there is ‘little optionality left in the stock,’ and adds ‘it might make sense to wind down the company.’” On this news, Orphazyme’s ADS price fell $0.81 per ADS, or 11.05%, to close at $6.52 per ADS on June 21, 2021. The stock is currently trading at $5.25, significantly below the $11.00 per ADS offering price, damaging investors.
If you purchased ADSs of Orphazyme A/S (ORPH) pursuant to the Company’s IPO, or between September 29, 2020 and June 18, 2021, you have until September 7, 2021, to ask the court to appoint you lead plaintiff for the class.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
