This is a securities class action on behalf of all purchasers of Trevena common stock (NASDAQ: TRVN) between May 2, 2016 and October 8, 2018, both dates inclusive (the “Class Period”) seeking remedies against Trevena and certain of its most senior executives under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and Rule l0b-5 promulgated there under.
Trevena is a clinical stage biopharmaceutical company. At the start of the Class Period, the Company’s most advanced drug under development was Olinvo (a/k/a “Oliceridine” and “TRV130”), an intravenous pain reliever which was undergoing a Phase III clinical trial for the treatment of moderate-to-severe postoperative pain after surgery. According to Trevena, its Phase II clinical trial for Olinvo had demonstrated that Olinvo was superior to the then standard of care for post-surgery pain reduction, morphine. Trevena also claimed that once approved for commercial distribution, it planned to price Olinvo higher than morphine, because Olinvo purportedly caused less costly adverse effects than morphine, such as respiratory problems, nausea and vomiting.
As alleged, unbeknownst to investors, the U.S. Food and Drug Administration (“FDA”) had expressly warned Trevena, however, prior to the start of the Class Period, of many defects in the design of its Phase III clinical trial – design defects Trevena refused to remedy – that threatened to render the data derived in the Phase III clinical trial worthless. As a result, the Company’s prospects of obtaining FDA approval for commercial distribution of Olinvo, and its eventual commercial successes, were much lower than defendants were leading the market to believe throughout the Class Period.
Based on defendants’ Class Period materially misleading statements and omissions concerning the strength of its clinical development program, the design of its Phase III Olinvo clinical trial and its prospects for obtaining FDA approval to commercially distribute Olinvo and the drug’s financial prospects, the price of Trevena common stock traded at artificially inflated prices throughout the Class Period, trading above $8 per share on May 10, 2016.
When the Company disclosed the results of the Phase III clinical trial of Olinvo on February 21, 2017, the data did not show that Olinvo caused any meaningfully less adverse effects than morphine. On this news, the price of Trevena common stock plummeted approximately 40%, or $3 per share, on February 21, 2017, on unusually heavy trading of more than 10.5 million shares trading.
Then, on October 9, 2018, the FDA made public its prior criticisms of the design of the Phase III clinical trial and disclosed that its Advisory Committee was recommending that the FDA reject the Company’s New Drug Application (“NDA”) for Olinvo. On this news, the price of Trevena common stock plummeted another 64%, almost $2 per share, on October 9, 2018, again on unusually high trading of more than 40 million shares trading.
On October 11, 2018, trading in Trevena common stock was halted on pending news. Later that day, the Company disclosed that the FDA Advisory Committee had voted against approving Olinvo. While Trevena contended that “[t]he FDA [was] not bound by the Advisory Committee’s recommendations” that day, it also acknowledged that the FDA “takes its advice into consideration when making its decision.” When trading recommenced on October 12, 2018, the stock price dropped another 7%, closing below $1 per share, on unusually high trading of more than 12 million shares.
Finally, on Friday November 2, 2018, Trevena disclosed that the FDA had formally rejected its NDA for Olinvo, with the FDA stating in its complete response letter that the safety data was not adequate.