SAN FRANCISCO (CN) – Rigel Pharmaceutical’s share price more than tripled after the company released misleading information about a rheumatoid arthritis drug, shareholders say in a federal class action.
Rigel touted the success of its R788 arthritis drug in a Dec. 13, 2007 press conference, but withheld material information about the clinical trial on 189 patients in the United States and Mexico, according to the complaint. Share price more than tripled on the news in one day, from $8 to $25.95. On Feb. 6, 2008, Rigel sold 5 million shares of stock at $27, reaping $135 million.
But the complaint adds: “On October27, 2008, Rigel presented the full results of the study at a meeting of the American College of Rheumatology and on an investor conference call. Those results contained adverse information omitted from the Company’s December 13, 2007 press release and Form8 -K, as well as from the Registration Statement and the presentations on February 11, 2008 and July 8,
2008. When this adverse information about the study’s results was finally disclosed, Rigel’s stock price plunged 38% in a single day, from $14.41 to $8.84.”
Shareholders are represented by Christopher with Coughlin Stoia Geller of San Francisco.