NEW YORK, NY / ACCESSWIRE / July 14, 2016 / Bronstein, Gewirtz & Grossman, LLC reminds investors that a securities class action has been filed in the United States District Court, District of Massachusetts on behalf of those who purchased shares of Chiasma, Inc. ("Chiasma" or the "Company") (CHMA) between July 15, 2015 and April 17, 2016 inclusive (the "Class Period").
Chiasma is a biopharmaceutical company focused on developing and commercializing orphan medications to better meet the needs of patients and healthcare professionals.
Chiasma's leading product is oral octreotide, Mycapssa, used to treat acromegaly, a condition resulting from excess growth hormone. As of June 2015, Chiasma had finished its multinational Phase 3 clinical trial of Mycapssa and submitted a new drug application ("NDA") to the U.S. Food and Drug Administration ("FDA") for approval to market and sell Mycapssa. On or about July 15, 2016, Chiasma completed its IPO, issuing 6.4 million shares and raising approximately $102 million of net proceeds.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding Chiasma's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Chiasma's Phase 3 clinical trial for Mycapssa was not adequate to show effectiveness and for FDA approval; (2) Chiasma's management of its suppliers was not adequate to avoid mistakes, thus delaying FDA approval; and (3) consequentially, Chiasma's public statements were materially false and misleading at all relevant times.
On April 18, 2016, premarket, Chiasma announced that the FDA had issued a Complete Response Letter for Mycapssa's NDA, explaining that the FDA did not see ample proof of efficacy to warrant approval and advising the Company to conduct another clinical trial to address this deficiency. The FDA also listed its apprehensions about certain aspects of the Company's single-arm, open-label Phase 3 clinical trial and strongly recommended a randomized, double-blind and controlled trial that enrolls patients from the United States and for a long enough duration to ensure that control of disease activity is stable at the time point selected for the primary efficacy assessment. The FDA instructed that certain deficiencies that were found at a recent site inspection would also need to be resolved before approval.
Following this news, Chiasma stock dropped $6.42 per share, or 63.13%, to close at $3.75 on April 18, 2016.