— Johnson Fistel, LLP (@JF_LLP) July 2, 2019
On June 27, 2019, the Honorable Denise J. Casper, United States District Judge for the District of Massachusetts, granted final approval of an $18.75 million all-cash settlement in Gerneth v. Chiasma, Inc., a class action charging Chiasma, Inc. and certain of its executives, directors, and underwriters with violations of Sections 11 and 15 of the Securities Act of 1933. The settlement proceeds will be paid to Chiasma shareholders who purchased or acquired common stock issued by Chiasma on or before June 9, 2016, pursuant or traceable to Chiasma’s
initial public offering held on or about July 15, 2015 (the “IPO”), and who submit a valid and timely proof of claim. Johnson Fistel, along with co-lead counsel, represents lead plaintiff in the litigation.
Specifically, the operative complaint filed in the case alleges that the offering materials filed in connection with the company’s July 2015 IPO contained misstatements and omissions concerning the timeline and likelihood of FDA approval for Mycapssa, a pharmaceutical drug which was being developed by Chiasma for the treatment of acromegaly, a condition that results in the body’s production of excess growth hormone. Because of these misstatements and omissions, the complaint alleges defendants were able to price Chiasma stock at $16.00 per share in connection with its IPO, raising gross proceeds of approximately $106.5 million. Thereafter, on April 15, 2016, Chiasma announced that the FDA issued a Complete Response Letter stating the Mycapssa NDA “is not ready for approval in its present form.” On April 18, 2016, the company reported that “the FDA [had] advised Chiasma that the Agency did not believe the company’s application had provided substantial evidence of efficacy to warrant approval, and [had] advised Chiasma that it would need to conduct another clinical trial in order to overcome this deficiency.” Chiasma’s stock price decreased from a closing price of $10.17 on April 15, 2016, to a closing price of $3.75 on April 18, 2016, a decrease of 63%. On June 9, 2016, the date the litigation was filed, Chiasma’s common stock closed at just $3.14 per share.
Attorneys Frank J. Johnson, Michael I. Fistel, Jr., William W. Stone, Mary Ellen Conner, and Kristen O’Connor led the prosecution of the litigation for Johnson Fistel and helped achieve this superb result on behalf of lead plaintiff and the class.
Gerneth v. Chiasma, Inc., No. 1:16-cv-11082-DJC (D. Mass.)