Dendreon, Prostate Drug Maker, Sued Over 2011 Stock Drop
Company officers and directors misused proprietary information about Provenge, which costs $93,000 per therapy cycle, by not revealing that doctors were reluctant to prescribe it because they had to pay up front and may have trouble getting reimbursed from Medicaid or private insurers, Investor Herbert Silverberg claims.
The reimbursement issue was “a consistent topic of concern internally,” while officials “touted lofty goals” for the drug, according to the Delaware Chancery Court complaint filed today in Wilmington.
Provenge was approved in the U.S. in 2010 as the first therapy designed to train the body’s immune system to attack cancer cells as if they were a virus.
The following year, the company “acknowledged that acceptance of Provenge would be a much more gradual process,” than first thought, according to the complaint. Dendreon shares fell 67 percent, from $35.84 on Aug. 3 to $11.69 the next day, plaintiff’s lawyers contend.
In the so-called derivative lawsuit, Silverberg asks a judge to award damages from officials to the company, “disgorgement of all profits” from wrongdoing and positive corporate governance provisions to protect shareholders in the future.
“While it is our practice not to comment on litigation, we believe this suit is baseless and without merit,” Lindsay Rocco, a spokeswoman for Dendreon, said in an e-mailed message.
Seattle-based Dendreon fell 22 cents, or 3.2 percent, to $6.77 in Nasdaq Stock Market trading today.
The case is Silverberg v. Gold, CA7646, Delaware Chancery Court (Wilmington).
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