Biotechnology Firm 10b-5 Matter -- Phase III Testing

Analysis Group was retained by counsel for the defendant in a 10b-5 securities class action litigation in which our client was alleged to have withheld animal-testing information that allegedly was relevant to the prospects for FDA marketing approval of an allergy drug in Phase III of the approval process. Plaintiffs claimed that, had the withheld information been disclosed, investors would have believed that there was no chance of FDA approval. Our work involved an innovative approach to determining the portion of the stock price drop that reasonably could have been attributed to the allegedly withheld information. As part of a mediation process, our expert filed an expert report presenting theoretical and empirical analyses showing that investors still would have assigned a significant probability of approval even had the allegedly withheld information been disclosed. This led to major reductions in the appropriate amount of economic damages, and even a reduction in the damages calculated by the opposing expert. The case settled favorably for our client.