Lawsuit Claiming Coverup by CTI Biopharma Corp. Settles for $20 Million
In 2016, CTI Biopharma Corp.’s stock dropped sharply on news that the testing of its lead drug, pacritinib, had been stopped by the FDA. Pacritinib was a drug designed to treat a form of blood cancer. CTI was testing the drug for safety when participants in the test started dying at rates that were considered higher than normal. CTI was advised to stop the testing by independent advisors but ignored that advice.
Rather than stop the testing, CTI tried to cover it up and falsely told investors that the drug was safe and testing was going well. When the FDA discovered the high death rates, it stopped all further testing of the drug. When the FDA’s actions became public, CTI’s stock dropped sharply because of the “alarming safety problems” with the drug, and investors lost millions of dollars.
Investors have now settled the lawsuit for $20 million. The $20 million settlement will compensate investors for the losses caused by CTI’s cover up. TMLG and Faruqi and Faruqi, LLP acted as counsel for two of the plaintiff investors in this action.