Company: Recro Pharma, Inc.
Class Period: July 17, 2017 — May 23, 2018
Court: U.S.D.C. – Eastern District of Pennsylvania
On October 5, 2018, Kaskela Law LLC was appointed by the Court as counsel for a putative class of Recro Pharma, Inc. (“Recro” or the “Company”) (NASDAQ: REPH) investors. Subsequently, on December 10, 2018, Kaskela Law LLC filed an Amended Complaint against Recro and certain of the Company’s executive officers alleging violations of the federal securities laws.
As detailed in the Amended Complaint, Recro is a specialty pharmaceutical company that develops non-opioid therapeutics for the treatment of pain in the post-operative setting. The Company’s lead product is a proprietary injectable form of meloxicam (“IV meloxicam”), a long-acting preferential COX-2 inhibitor to be used for the management of moderate to severe pain. Recro announced that it filed a New Drug Application (“NDA”) for IV meloxicam in July 2017, and the market buzzed with excitement with the hope that IV meloxicam would offer surgeons and their patients a long-lasting, once daily, non-opioid alternative drug to manage pain following surgery.
The Amended Complaint alleges that, before and after the filing of the NDA, Defendants misled investors about the market for IV meloxicam. Specifically, Defendants made numerous materially false and misleading statements that soft tissue surgeons, such as gastrointestinal/colorectal surgeons, and their patients were IV meloxicam target opportunities even though Defendants knew, but failed to disclose, that key opinion leader physicians told the Company that they were not impressed with the drug’s analgesic effects for soft tissue procedures and it should not be used in soft tissue procedures.
Additionally, the Amended Complaint alleges that defendants also misled investors to believe that, even though IV meloxicam was manufactured overseas, there was “oversight by our internal managers.” In reality, however, Recro did not have a handle on the manufacturing process. The Company had only one employee, the Chief Executive Officer’s brother hired as a result of nepotism, to oversee the manufacturing of IV meloxicam and its packaging in Ireland. Although key opinion leader physicians voiced concerns to the Company about the quality and oversight of manufacturing IV meloxicam overseas, Recro did not disclose these concerns to investors.
On May 24, 2018, Recro announced that the FDA had declined to approve Recro’s NDA for IV meloxicam. In its Complete Response Letter (“CRL”) to the Company, the FDA stated that it is unable to approve the application in its current form “because data from ad hoc analyses and selective secondary endpoints suggest that the analgesic effect does not meet the expectations of the FDA.” Additionally, the CRL raised chemistry, manufacturing and control-related “questions on extractable and leachable data provided in the NDA.” On this news, Recro’s share price fell $6.79, or 54.67%, to close at $5.63 on May 24, 2018.
For additional information about this action, or to request a copy of the Amended Complaint, please contact Kaskela Law LLC at (888) 715 – 1740.