Class Period: Mar 16, 2009 to May 5, 2010
Lead Plaintiff Deadline: Sep 27, 2010 + Deadline passed
Summary of Case:
A securities class action has been filed against XenoPort, Inc. (XNPT) ("XenoPort" or the "Company") on behalf of all securities purchasers from May 5, 2009 through February 17, 2010, inclusive ("Class Period"), in the United States District Court for the Northern District of California.
The complaint alleges that during the Class Period, defendants publicized misleading and incomplete information about XenoPort's Phase 3 clinical program for an extended-release tablet and development stage drug called Horizant (gabapentin enacarbil), also known as XP13512 ("512"), as a potential treatment for moderate-to-severe primary Restless Legs Syndrome ("RLS"), including that there was strong evidence of safety and indicating that it remained on track, creating an opportunity for the Company to raise money. However, the Company's top management was aware that 512 had earlier shown an increased occurrence of pancreatic cancer in lab rats. While the drug had nonetheless been approved for more serious indications, this presented a risk that the FDA would not approve 512 for less serious maladies given the devastating impact of pancreatic cancer. Instead of disclosing these findings, which would have affected the public's expectations about the likelihood of FDA approval, defendants repeatedly assured the public as to 512's safety and efficacy. As a result of these false and misleading statements, XenoPort stock traded at artificially inflated prices during the Class Period, reaching a high of $24.75 per share on September 17, 2009 and permitting the Company to complete a secondary offering in July 2009 of 2.875 million shares of XenoPort stock at $19 per share for proceeds of nearly $45 million.
On February 17, 2010, defendants publicly disclosed that the FDA had declined approval of Horizant, with concerns about laboratory results showing pancreatic cell tumors in rats as a result of the use of the drug. On this news, XenoPort's stock fell $12.93 per share to close at $6.67 per share on February 18, 2010 - a one-day decline of 65% on volume of 36.5 million shares, over 16 times the average three-month daily volume.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.