In October, 2017, shares of Antares Pharma, or ATRS, dropped approximately 40% following news that the Food and Drug Administration could not approve QuickShot Testosterone. Investors in Antares Pharma (ATRS) may be able to recover some or all of their recent investment losses either by participating in a recently filed securities class action lawsuit or by pursuing a FINRA arbitration against the financial advisor who recommended Antares Pharma. This article will discuss both recovery options.
QuickShot Testosterone’s Failure Causes 40% Stock Decline
After the Food and Drug Administration found deficiencies in Antares Pharma’s drug QuickShot Testosterone, also known as Xyosted, ATRS stock declined approximately 40%. The following timeline summarizes critical events related to the FDA’s actions:
December 21, 2016: Antares Pharama announced its submission of a new drug application for Xyosted (originally known as QuickShot Testosterone or QST) to the United States Food and Drug Administration. Several other positive press releases follow.
March 14, 2017: Antares Pharma files its 2016 10-K with the Securities and Exchange Commission. This 10-K indicated that one of the clinical studies had “positive top-line pharmacokinetic results.” The 2016 10-K also reconfirmed the announcement of a “successful completion” of the additional supplemental safety study.
October 12, 2017: Antares Pharma disclosed that on October 11, 2017 it received a letter from the FDA stating that the agency had “identified deficiencies” in the new drug application for Xyosted. This news caused the price of Antares Pharma to fall approximately 40%.
October 20, 2017: Antares Pharma announced the receipt of a Complete Response Letter from the FDA. The complete response letter indicated that the FDA could not approve Xyosted in its present form due to concerns that the drug caused a meaningful increase in blood pressure and raised a concern regarding occurrences of depression and suicide.
October 23, 2017: A securities class action lawsuit was filed against Antares Pharma, Inc. as well as two of its officers. The case was filed in the United States District Court for the District of New Jersey.
Securities Class Action Lawsuit Against Antares Pharma
On October 23, 2017, a securities class action lawsuit was filed against Antares Pharma in the United States District Court for the District of New Jersey. The securities class action complaint alleges that Antares Pharama engaged in a scheme to cause investors to acquire shares of its stock at artificially inflated prices. Specifically, the complaint alleges Antares Pharma released materially false and misleading information about Xyosted. The complaint cites various reports, press releases and public filings by Antares Pharma as the source of the allegedly misleading information. If you purchased stock in Antares Pharma between December 21, 2016 and October 12, 2017, you may be eligible to participate in the securities class action lawsuit for ATRS.
Is Your Financial Advisor to Blame?
In addition to participating in the securities class action lawsuit for Antares Pharma, investors who were recommended ATRS by their financial advisor may be able to recover monies from those companies and individuals. Specifically, financial advisors and broker-dealers must ensure that investments are “suitable” for sale to their customers. There are two parts to suitability. The first part requires a financial advisor to conduct due diligence on an investment to ensure that the security is suitable for sale generally (i.e. to any investor).
In addition to its obligation to conduct due diligence, financial advisors also have an obligation to recommend investments that are suitable for customers in light of their age, risk tolerance and liquidity needs. Investors who invested in Antares Pharma should have understood that their investment was high risk and subject to volatility. If you purchased Antares Pharma through a financial advisor, that advisor has a legal obligation to not simply explain the risks of an investment to you, but only recommend investments that are consistent with your individual risk tolerance.
Did You Know About Your Financial Advisor’s Conflict of Interest?
Many of the financial advisors who sold interests in Antares Pharma were also paid investment banking fees by the company. This means that some, although certainly not all, of the financial advisors who sold Antares Pharama had a material conflict of interest that needed to be disclosed to their customers. It also means that these financial advisors were highly incentivized to recommend Antares Pharma because of the potentially lucrative fees.
What are my Next Steps?
Please feel free to contact either Marc Fitapelli at 212-658-1501 or Jonathan Kurta at 212-658-1502 to discuss your recovery options for your investment in Antares Pharma. We would be happy to provide you with a free, confidential consultation to discuss your legal rights and the potential avenues for recovery.