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A settlement deal is in the works for a blockbuster securities lawsuit that pits investors against Cambridge, Mass.-based Aveo Pharmaceuticals Inc.
On Friday, investors in the biopharmaceutical company asked a federal judge to approve a $17.7 million agreement that would end a class action lawsuit that accused the company of misleading investors about the federal government’s concerns over tivozanib, a drug the company developed to treat kidney cancer.
The lawsuit stems from assurances Aveo executives gave to investors that the Food and Drug Administration was likely to approve tivozanib, even though the agency had actually told Aveo that it objected to the protocol used for the drug’s clinical trial and was worried that the drug could be toxic.
In a May 2012 meeting, the FDA recommended that Aveo conduct a second clinical trial of tivozanib because of issues with the protocols used in the first trial. The FDA also told Aveo officials that they were concerned that the drug was potentially increasing patient deaths and could be toxic.
The investor lawsuit, filed on behalf of lead plaintiffs Robert Levine and William Windham, alleges that the company misled investors in the company about the FDA’s concerns – even as the company was secretly planning to spend $83 million to launch a second clinical trial.
When the news of the FDA’s objections finally became public, stock in Aveo fell by nearly 50 percent.
The settlement, under which neither the company nor its top executives would admit wrongdoing, would pay investors $15 million through a settlement fund and issue 2 million shares of its stock to the investors – a benefit valued at $2.73 million.
The decision to settle the case comes just two months after U.S. District Court Judge Denise Casper allowed the class action suit to proceed.
Settlement of AVEO Pharmaceuticals, Inc. (AVEO) Shareholder Lawsuit
AVEO Pharmaceuticals, Inc. (AVEO) investors may be able to collect significant financial compensation for their losses. The recent settlement with the company has set aside tens of millions of dollars for compensating shareholders.
Own shares of AVEO Pharmaceuticals, Inc. (AVEO)? AVEO Pharmaceuticals, Inc. (AVEO) Shareholder Lawsuit Settlement. Contact us to protect your rights.
If you have purchased shares of AVEO Pharmaceuticals, Inc. (AVEO), complete the form on this page or call 1-800-934-2921 right now to protect your rights.