BALA CYNWYD, Pa., July 28, 2004 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Middle District of North Carolina on behalf of all securities purchasers of POZEN, Inc. (Nasdaq:POZN) ("POZEN" or the "Company") from July 31, 2003 through May 28, 2004, inclusive (the "Class Period"). If you are a member of the class described above, you may, not later than August 3, 2004 move the Court to serve as lead plaintiff of the class, if you so choose.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges POZEN, John R. Plachetka, Matthew E. Czajkowski, and John R. Barnhardt with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. According to the complaint, POZEN is a pharmaceutical development company focused on developing a portfolio of drugs for the global migraine market. The Company's lead product candidates included MT 100, a proprietary formulation containing metoclopramide hydrochloride and naproxen sodium; MT 300, a proprietary formulation of dihydroergotamine mesylate in a pre-filled syringe, and MT 400, which is being developed as a co-active acute migraine therapy.
This action centers around the Company's false and misleading statements concerning its migraine drugs MT 100 and MT 300. More specifically, the Company failed to disclose the following adverse facts: (1) that defendants knew or recklessly disregarded the fact that its drugs MT 100 and MT 300 were unsafe and ineffective; (2) that despite knowing these facts, the Company entered into various licensing agreements in order to book revenues and achieve positive cash flows; (3) that as a result of booking revenues and achieving positive cash flows, the defendants were able to manipulate the Company's stock price in order to attain large bonuses, which were tied to the Company's stock price, not the success of the Company's product pipeline; (4) with respect to the drug MT 300, defendants knew or recklessly disregarded the fact that the drug resulted in higher incidences of nausea and vomiting as compared to placebo in two Phase III trials and that the drug failed to show statistical superiority as compared with placebo with regard to controlling symptoms of migraines; (5) with respect to the drug MT 100, defendant knew or recklessly disregarded the fact that MT 100's chances of being approved by the FDA were less than 50% because of concerns about several primary end points, particularly pain response to migraines at two hours, lack of data showing consistent two-hour pain response and symptom relief, and worries about the drug's carcinogenicity; and (6) that MT 100's failed to show superiority to a placebo as measured by a two-hour response and two-hour symptom migraine relief.
The blow to the Company occurred on October 20, 2003, when POZEN announced that it had received a not-approvable letter from the U.S. Food and Drug Administration ("FDA") related to its New Drug Application ("NDA") for MT 300?. The letter was issued based on the FDA's conclusion that while MT 300 achieved its primary endpoint, it failed to achieve statistical significance versus placebo for the relief at two hours of the secondary symptoms of migraine (nausea, sensitivity to light, and sensitivity to sound).
On news of this, shares of POZEN fell $5.83 per share, or 32.8 percent, to close at $11.94 per share on unusually high trading volume on October 20, 2003.
The final blow to the Company's manipulative scheme occurred on June 1, 2004. Then, POZEN announced that the FDA issued a not-approvable letter on Friday, May 28, 2004 concerning the Company's NDA for MT 100? for the acute treatment of migraine. In the FDA letter, the FDA cited the apparent lack of superiority of MT 100 over naproxen for sustained pain relief, which was the primary endpoint for the two component studies. Additionally, for the first time the FDA raised an approvability issue concerning the risk of tardive dyskinesia ("TD") presented by the use of metoclopramide, one of the components of MT 100. In this regard, the FDA stated in their letter, "given the number of patients exposed to MT 100 for at least one year in your database (about 300), the absence of any detected cases is consistent with a true rate of TD of about 1%, an unacceptably high risk in the absence of any demonstrated advantage of the product." Further, the FDA mentioned that based on animal studies, there may be a potential risk of carcinogenicity, presumably due to metoclopramide.
News of this shocked the market. Shares of POZEN fell $3.69 per share, or 37.2 percent, to close at $6.23 per share on unusually high volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com/currentcases.cfm.
If you are a member of the class described above, you may, not later than August 3, 2004 move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Schiffrin & Barroway, or other counsel of your choice, to serve as your counsel in this action.