Keryx Biopharmaceuticals Inc. has defeated claims that it misled investors about the results of a clinical trial. While the case is relatively small, the rationale behind the dismissal could prove useful to other drug companies facing securities fraud claims.
In a ruling issued on Friday, U.S. District Judge Katherine Forrest in Manhattan dismissed an investor class action alleging that Keryx overhyped the results of a trial for its cancer drug Perifosine. Plaintiffs lawyers alleged that the drug trial’s methodology was flawed, that Keryx was fully aware of the flaws, and that Keryx’s public statements about the trial being a success were therefore inherently dishonest. Forrest rejected that argument, ruling that it would be “unjust—and could lead to unfortunate consequences beyond a single lawsuit—if the securities laws became a tool to second guess how clinical trials are designed and managed.”
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