Acura Pharmaceuticals Sued by Shareholder After FDA Rejects Painkiller
Acura Pharmaceuticals Inc. was accused in a lawsuit of misleading shareholders about the prospects of winning U.S. Food and Drug Administration approval for the painkiller Acurox.
Chief Executive Officer Andrew Reddick and three other executives allowed Palatine, Illinois-based Acura to make misleading public statements about the drug’s performance in clinical trials, according to the complaint filed Sept. 10 in federal court in Chicago by Chris Bang, an Acura investor.
A FDA advisory panel in April rejected Acura’s request for clearance to market Acurox as deterring abuse, questioning the effectiveness of pairing the narcotic oxycodone with niacin. Adding niacin is intended to cause unpleasant skin flushing if too many pills are taken at once.
“Defendants knew the niacin effects were easily overcome by abusers who knew to simply eat a heavy meal or take aspirin with the Acurox,” according to Bang’s complaint.
Acura fell 32 percent to $4.02 on April 23, the day after the FDA panel voted 19-1 against recommending approval. The shares rose 4 cents to $2.42 at 11:55 a.m. New York time in Nasdaq Stock Market trading.
“Acura believes the claims are meritless and intends to defend this lawsuit vigorously,” the company said in a statement.
Bang, who alleges a violation of federal securities law, is seeking class-action, or group, status on behalf of people who bought Acura stock between Feb. 21, 2006, and the FDA’s April rejection.
The case is Bang v. Acura Pharmaceuticals Inc., 10cv5757, in the Northern District of Illinois (Chicago).