On April 25, 2017, Pomerantz LLP was appointed Co-Lead Counsel in a class action lawsuit filed against Stemline Therapeutics, Inc. (“Stemline” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 17-cv-00940, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired Stemline securities: (1) pursuant and/or traceable to Stemline’s secondary public offering on or about January 20, 2017 (the “Offering”); and/or (2) on the open market between January 19, 2017 and February 1, 2017, inclusive (the “Class Period”). Plaintiff seeks to recover compensable damages caused by Defendants’ violations of the federal securities laws under the Securities Act of 1933 and under the Securities Exchange Act of 1934.
Stemline is a clinical stage biopharmaceutical company that focuses on the discovery, acquisition, development, and commercialization of proprietary oncology therapeutics in the United States. Stemline is presently conducting an ongoing pivotal Phase 2 trial in blastic plasmacytoid dendritic cell neoplasm, using Stemline’s experimental compound, SL-401. At present, BPDCN has no approved treatment.
On January 20, 2017, Stemline commenced a Secondary Public Offering, offering 4.5 million shares of its common stock at $10.00 per share, with expected gross proceeds to Stemline of $45 million.
The complaint alleges that in the offering documents for the Secondary Public Offering and throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: Stemline officials failed to disclose that a cancer patient in one of its trials died from a severe side effect due to SL-401 on January 18, 2017, immediately prior to the Company’s Secondary Public Offering.
On February 2, 2017, before the market opened, The Street published an article entitled “Side Effect Kills Cancer Patient in Stemline Therapeutics Drug Trial, the Company Raises Money,” revealing that on January 18, 2017, immediately prior to Stemline’s Offering, a cancer patient in a Stemline clinical trial tied to SL-401 died from a severe side effect.
On February 2, 2017, Stemline issued a press release entitled “Stemline Therapeutics Provides Update on Pivotal BPDCN Trial,” confirming the patient’s death.
On this news, Stemline’s share price fell $4.15, or approximately 42.5%, to close at $5.60 on February 2, 2017, damaging investors.