Stockholders v Praecis Pharmaceuticals
Praecis Pharmaceuticals Stockholders Sue for Millions in Lost Stock Value
A class action has been filed in the District Court of Massachusetts against Praecis Pharmaceuticals (NASDAQ:PRCS), a Massachusetts based pharmaceutical company, and certain of its officers and directors by stockholders who purchased the company's common stock between November 25, 2003 and December 6, 2004. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, 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.
Specifically, the complaint alleges that Praecis, among other things:
• failed to disclose that the distribution of their drug, Plenaxis, had been severely restricted by the U.S. Food and Drug Administration,
• failed to establish appropriate physician education about Plenaxis
• had difficulties convincing physicians to prescribe Plenaxis due to uncertainty over its use and concerns over reimbursement.
Plenaxis is Praecis' new treatment for advanced prostate cancer. Praecis lost nearly $14 million in the quarter ending September 30, 2004 versus $12.8 million for the same period the prior year. The company attributed to a major increase in sales and marketing expenses to help support the launch of Plenaxis in the United States.
Praecis' shares have traded between a yearly closing high of $7.38 on January 27, 2004 and a low of $1.61 on December 6, 2004.
