Pomerantz Appointed Lead Counsel in MEI Pharma Securities Litigation
On December 17, 2020, U.S. District Judge William Q. Hayes of the Southern District of California appointed Pomerantz LLP as Lead Counsel on behalf of Lead Plaintiff Ramesh Mahalingam in Bahat v. MEI Pharma, Inc., 20-cv-1543 (S.D. Cal.), a securities litigation being pursued on behalf of a class of defrauded investors concerning allegations that MEI Pharma, Inc. (“MEI Pharma” or the “Company”) had overstated the efficacy of Pracinostat, one of its new drug candidates.
MEI Pharma is a San Diego-based late-stage pharmaceutical company that develops cancer therapies, including the anti-cancer agent Pracinostat.
The complaint alleges that, between August 2, 2017 and July 1, 2020, the defendants issued materially false and misleading statements and failed to disclose that: (i) MEI Pharma had overstated Pracinostat’s potential efficacy as a treatment for acute myeloid leukemia (“AML”); (ii) consequently, the Company’s Phase 3 Pracinostat Trial (“Phase 3 Trial”) was unlikely to meet its primary endpoint of overall survival; and (iii) once revealed, the foregoing was foreseeably likely to have a material negative impact on the prospects for Pracinostat and the Company’s financial condition.
On August 2, 2017, MEI Pharma issued a joint press release with Helsinn Therapeutics (US), Inc. (“Helsinn”), a pharmaceutical company that was developing Pracinostat with the Company, announcing that the first patient had been dosed in the Phase 3 Trial, with CEO Gold stating that the Phase 3 Trial was the “culmination of diligent preparation” and “rigorously designed.” Gold further stated that “Pracinostat [was] now one pivotal step closer to serving” those suffering from AML.
On September 5, 2017, MEI Pharma filed its annual report on Form 10-K with the U.S. Securities and Exchange Commission (the “SEC”) for the fiscal year ended June 30, 2017 in which the Company stated that Pracinostat was a “potent” anti-cancer agent and touted the median overall survival of patients observed in the previous Pracinostat Phase 2 Trial (“Phase 2 Trial”). The Company repeated the same claims regarding “potency” and the median overall survival of Phase 2 Trial patients in annual reports filed on Form 10-K with the SEC on August 30, 2018 and August 28, 2019.
The truth emerged on July 2, 2020 when MEI issued a press release announcing that it was discontinuing the Phase 3 Trial “based on a lack of efficacy” because “it was unlikely to meet the primary endpoint of overall survival compared to the control group.” On this news, MEI Pharma’s share price fell $0.78 per share, or 18.26%, to close at $3.49 per share on July 2, 2020.