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Celgene: New Jersey Federal Court Sustains Securities Fraud Claims Alleging Failure to Disclose Laggard Testing of Developmental Drug

In September 2018, Kessler Topaz was appointed to represent a putative class of investors in consolidated actions in the United States District Court for the District of New Jersey against pharmaceutical giant Celgene and several of its executive officers.  This securities fraud case involves Celgene’s concealment of a critical drug metabolite discovered during the clinical development of the multiple sclerosis drug Ozanimod and the company’s ongoing misrepresentations to investors that Ozanimod was on track to be approved by the U.S. Food and Drug Administration (FDA) pursuant to the company’s timeline.  Unbeknownst to the public, the discovery of the metabolite required substantial, additional studies mandated by the FDA that imperiled the timeline for regulatory approval.  After Celgene filed a facially deficient new drug application with the FDA, the agency issued a rare, “refuse-to-file” letter, causing investors to question the company’s prior assurances and the company’s stock price to plummet. 

On December 19, 2019, U.S. District Judge John Michael Vasquez issued a 49-page opinion sustaining the shareholders’ claims.  The case is now in discovery.  

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