Several class actions have been filed against pharmaceutical research and development company Entropin, Inc. (OTC BB:ETOP), and certain of its officers and directors on behalf of purchasers of stock and warrants in Entropin's March 15, 2000, public offering through which investors purchased units consisting of one share of common stock and one common stock purchase warrant. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

The actions allege that the defendants violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 by making a series of materially false and misleading statements concerning the efficacy and timeline for clinical development of its developmental drug Esterom. In its March 2000 public offering, Entropin sold 2.3 million shares of common stock at approximately $7 per share and 2.3 million warrants at $.25 per share, reaping proceeds of more than $16.6 million.

The lawsuits allege that the registration statement for the public offering was false and misleading, in that it represented the following: (1) that the company had conducted phase II trials that proved that Esterom was highly effective compared to placebo in improving range of motion for persons with shoulder and back injuries; (2) that the company was currently undertaking phase III clinical trials to further proof efficacy in support of a new drug application (NDA) with the FDA; and (3) that the company intended to file an NDA in early 2001.

In fact, the lawsuits allege that the phase II trials indicated that, at certain dose levels, placebo was found to be as effective as or more effective than Enterom. Further, the defendants failed to disclose that the propylene glycol used as an ingredient in Enterom, and also as the placebo in the clinical trials, is itself an active ingredient and effective in improving range of motion for painful shoulder injuries. The lawsuits allege that there was a chance that some, if not all, of the improved range of motion supposedly measured in the clinical trials was due to the effects of propylene glycol, and not the supposedly active ingredient in Enterom. As to the Enterom NDA, company officials allegedly knew that the drug had at least two or three years in R&D before it would be ready for FDA approval.

If you purchased securities issued by Entropin during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by October 12, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve you in this action, or you may choose to do nothing, and remain in the class as a silent member.