Pomerantz Appointed Co-Lead Counsel in Zosano Pharma Securities Litigation
On February 4, 2021, U.S. District Judge Edward M. Chen of the Northern District of California appointed Pomerantz LLP as Co-Lead Counsel on behalf of Co-Lead Plaintiff Hosam Alqurashi in Zosano Pharma Corporation, 20-cv-7625 (N.D. Cal.), a securities litigation being pursued on behalf of a class of defrauded investors concerning allegations that Zosano Pharma Corporation (“Zosano” or the “Company”) misled investors regarding the results from clinical trials of zolmitriptan and the viability of regulatory approval for Qtrypta based on this data.
Zosano is a clinical stage pharmaceutical company. Its proprietary intracutaneous delivery system purports to offer rapid absorption of drug, consistent drug delivery, improved ease of use, and room-temperature stability. Its intracutaneous patch consists of an array of titanium microneedles that is coated with Zosano’s proprietary formulation of a previously approved drug that is attached to an adhesive patch. The patch purports to offer rapid and consistent delivery of the drug via the microneedles that penetrate the skin, resulting in dissolution and absorption of the drug.
Zosano’s lead product candidate is Qtrypta (M207), a formulation of zolmitriptan coated onto the Company’s microneedle patch for the treatment of migraines. The Company’s pivotal efficacy trial, called ZOTRIP, began in July 2016. In December 2019, Zosano submitted its New Drug Application (“NDA”) to the U.S. Food and Drug Administration (“FDA”) seeking regulatory approval for Qtrypta.
The complaint alleges that Zosano failed to disclose to investors that: (i) the Company’s clinical results reflected differences in zolmitriptan exposures observed between subjects receiving different lots; (ii) pharmocokinetic studies submitted in connection with the Company’s NDA included patients exhibiting unexpected high plasma concentrations of zolmitriptan; (iii) as a result of the foregoing differences among patient results, the FDA was reasonably likely to require further studies to support regulatory approval of Qtrypta; and (iv) as a result, regulatory approval of Qtrypta was reasonably likely to be delayed.
On September 30, 2020, after the market closed, Zosano disclosed receipt of a discipline review letter from the FDA regarding its NDA for Qtrypta and stated that approval was not likely. According to the Company’s press release, the FDA “raised questions regarding unexpected high plasma concentrations of zolmitriptan observed in five study subjects from two pharmacokinetic studies and how the data from these subjects affect the overall clinical pharmacology section of the application.” The FDA also “raised questions regarding differences in zolmitriptan exposures observed between subjects receiving different lots of Qtrypta in the company’s clinical trials.”
On this news, the Company’s share1 price fell $0.92 per share, or 56.79%, to close at $0.70 per share on October 1, 2020, on unusually heavy trading volume.
On October 21, 2020, Zosano disclosed receipt of a Complete Response Letter from the FDA. As a result of the previously identified deficiencies, the FDA recommended that Zosano conduct a repeat bioequivalence study between three of the lots used during development.
On this news, the Company’s share price fell $0.17 per share, or 27.8%, to close at $0.44 per share on October 21, 2020, on unusually heavy trading volume.