In an opinion issued on Friday, Judge Forrest dismissed the securities fraud claims of a putative class of Keryx Biopharmaceuticals shareholders. The plaintiffs had alleged that Keryx had hidden from the market that an important trial for an in-development cancer drug had failed. Judge Forrest disagreed:
There is a significant public interest in the development of life-saving drugs. For every drug that succeeds, others do not. Clinical trials are phased into stages: some drugs never make it past the first stage, others never make it past the second stage, and so on. The costs of failure are high, but the rewards for success are also high. The relationship and ratio between the two determines whether, as a matter of economics, the costs of experimentation are worth it. Publicly traded pharmaceutical companies have the same obligations as other publicly traded companies to comply with the securities laws, but they take on no special obligations by virtue of their commercial sector. It would indeed be unjust-and could lead to unfortunate consequences beyond a single lawsuit-if the securities laws become a tool to second guess how clinical trials are designed and managed. The law prevents such a result; the Court applies that law here, and thus dismisses these actions.
Continue Reading Judge Forrest Dismisses Securities Fraud Class Action Against Keryx Biopharmaceuticals