Dallas, Texas 07/01/2015 (Financialstrend) – Ampio Pharmaceuticals Inc (NYSEMKT:AMPE) is to face off with law firm Haldenstein Adler Freeman & Herz LLP in court, over allegations it violated some fiduciary laws. The class action lawsuit is on behalf of shareholders who purchased the stock between January 13, 2014, and August 21, 2014.
The law firm accuses Ampio Pharmaceuticals Inc (NYSEMKT:AMPE) of providing shareholders misleading statements as well as failing to disclose the actual nature of its operations during the class action period. The company’s clinical research organization that conducted the STEP study has also been pulled into the matter.
It is also not clear why the company opted to ship the trial drug for the STEP Study at lower temperatures than under the permitted specifications. As a result, Haldenstein Adler Freeman & Herz LLP alleges that Ampio Pharmaceuticals Inc (NYSEMKT:AMPE) statements turned out to be materially misleading and false.
The stock price traded at artificially inflated prices according to the complainant as a result of the company’s action. Ampio Pharmaceuticals on August 21, 2014, acknowledged that indeed the study drugs had been exposed to lower temperatures than permitted by specifications. The announcement caused the stock to plummet by 35% closing at $4.84 a share.
Independence and Credibility Concerns
Concerns over the viability of the clinical trials were further raised when the blog Buyerstrike raised some red flags that elicited credibility issues over the study. It is also unclear why the trials were left to continue under the supervision of one doctor yet study had 500 patients.
Dream Team Clinical Research organization that carried out the trials is said to have little clinical trial management experience, which raises credibility concerns over the results. The fact that the clinical research organization has its offices next door to Dr. Quang D. Vo who acted as the principal investigator of the trial is also a point of concern.