On July 16, 2018, investors sued Prothena Corporation, plc (Prothena, PRTA, or the Company) in United States District Court, Southern District of New York. Plaintiffs in the Prothena class action allege that they acquired Prothena stock at artificially inflated prices between October 15, 2015 and April 20, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information about the PRTA lawsuit, please continue on below:

Summary of the Allegations

Company Background

The Company (NASDAQ: PRTA) describes itself as a “a global biotechnology company seeking to fundamentally alter the course of progressive diseases.” As such, it says it is “focused on the discovery and development of novel therapies in the neuroscience category.”

According to its website, the Company’s history can be traced to a company called Athena Neurosciences, which was founded in 1986. Elan Corporation plc acquired Athena in1996, assumed its “discovery and development activities.” Then, in December 2012, Prothena established its current identity by separating from Elan.

Today, the Company says, it “focuses on what we do best – developing immunotherapy approaches that interact in novel ways with proteins that are involved in amyloid or cell adhesion diseases.”

Summary of Facts

Prothena and three of its current and former officers and/or directors (the “Individual Defendants”) now stand accused of deceiving investors by lying and withholding critical information about the Company’s business practices and prospects during the Class Period.

Specifically, they are accused of omitting truthful information about the Company’s lead product candidate for possible use in the treatment of amyloid light chain amyloidosis (“AL amyloidosis”) from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Prothena stock to trade at artificially inflated prices during the time in question.

The truth emerged in a series of events between June 29, 2017 and April 23, 2018. These included the publication of two reports by different investment research firms questioning the Company’s claims about its lead product candidate on June 29, 2017 and November 8, 2017; and the Company’s announcement on February 2, 2018 that its chief medical officer had resigned.

Before the market opened on April 23, 2018, Prothena shocked everyone by announcing that it would end all development of its lead product candidate for the treatment of AL amyloidosis after data from one of its clinical trials “failed to reach either its primary or secondary endpoints.”

A closer look…

As alleged in the July 16 complaint, the Company repeatedly made false and misleading public statements during the Class Period.

For example, in a press release issued February 18, 2016, the Company discussed the “’encouraging’ clinical results” from a clinical trial for its lead product candidate for potential treatment of AL amyloidosis, stating that: “NEOD001 Phase1/2 patients ‘achieved more than double the cardiac and renal biomarker responses when compared to historical data in patients treated off-label standard of care.”

In another press release issued on July 5, 2016, the Company announced new data from its “expanded Phase 1/2 clinical trial of NEOD001.” Specifically, it stated that the new Phase 1/2 data showed ‘best response rates of 53% and 63%’ in cardiac and renal-evaluable patients, which were ‘consistent with those previously reported.’”

Then, at a healthcare conference on September 12, 2016, one of the Individual Defendants stated in pertinent part: “We continue to see very consistent results from our dose escalation versus our expansion, and so that was very exciting for us.”

Impact of the Alleged Fraud on Prothena’s Stock Price and Market Capitalization

The following chart illustrates the stock price during the class period:

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE: The deadline to file for lead plaintiff in this class action is September 17, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Prothena common stock using court approved loss calculation methods.

Recently Filed Cases

Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action.  Please contact us if you would like an LK report for any of these cases:

About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.