CHICAGO, April 28, 2003 (PRIMEZONE) -- Much Shelist Freed Denenberg Ament & Rubenstein, P.C. announces that it has sued VaxGen Incorporated ("VaxGen" or the "Company") (Nasdaq:VXGN) and certain of its officers and directors in the United States District Court for the Northern District of California. The shareholder lawsuit is on behalf of all persons and entities who purchased VaxGen securities during the period August 6, 2002 through February 26, 2003, inclusive ("Class Period").
The Complaint alleges that VaxGen and certain of its officers and directors, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market during the Class Period. These alleged misstatements had the effect of artificially inflating the price of VaxGen securities.
If you wish to discuss your rights and interests, have questions regarding this notice or have information relevant to the lawsuit, you may contact Carol V. Gilden or Michael E. Moskovitz at Much Shelist Freed Denenberg Ament & Rubenstein, P.C., by calling a toll-free number 1-800-470-6824, or by sending an e-mail to investorhelp@muchshelist.com. Your e-mail should refer to VaxGen.
VaxGen is engaged in the development and commercialization of AIDSVAX, a vaccine designed to prevent infection or disease caused by HIV (Human Immunodeficiency Virus), the virus that causes AIDS. Allegedly, during the Class Period, defendants were completing the final stages of AIDSVAX's Phase III clinical trials required to obtain Food and Drug Administration approval to market AIDSVAX as an AIDS vaccine. According to the Complaint, throughout the Class Period, defendants caused VaxGen to make a number of positive statements about the status of the trial and describing their eventual plans to manufacture and market AIDSVAX, causing VaxGen's stock to trade at artificially inflated prices.
On Feb. 23, 2003, VaxGen shocked the market by reporting the long-anticipated results of the U.S. trials, disclosing that the "study did not show a statistically significant reduction of HIV infection within the study population as a whole, which was the primary endpoint of the trial." The partial disclosure of the overall failure of the U.S. clinical trial caused VaxGen's shares to plummet, declining over 50% to approximately $3 per share on Feb. 24, 2003.
However, even when defendants released the results on Feb. 24, 2003, they claimed that while the vaccine failed to demonstrate efficacy on U.S. caucasians, the trials had demonstrated 30%-84% efficacy rates in U.S. blacks and Asians. That analysis, the company said, had less than a 1% chance of being due to random chance, making it highly statistically significant. VaxGen President Donald P. Francis touted the results as evidence that AIDSVAX could protect against HIV infection. As reported by The Wall Street Journal on Feb. 24, 2003, the "results overall won't lead the Food and Drug Administration to approve the vaccine for use in the wider public, but the company hopes that further analysis, as well as results from another trial being conducted in Thailand on injection drug users, may prompt the agency to approve the vaccine for some ethnic minorities." These corrective statements had their intended effect and VaxGen's stock closed at close to $7 per share on Feb. 24, 2003.
On Feb. 26, 2003, defendants were forced to admit that the reliability of their earlier reports of higher efficacy rates for non-caucasians were impaired because they had not taken the requisite "penalties" to account for the fact that less than 500 of the 5000 clinical trial participants were non-caucasians, resulting in an extremely small subset of data being analyzed for non-caucasians. As the news that earlier promises that AIDSVAX could prove useful for non-caucasians fell apart, the stock declined further, resulting in a total loss in market cap since Nov. 18, 2002 of approximately 85%.
Plaintiff seeks to recover damages on behalf of all those who purchased VaxGen securities during the Class Period (August 6, 2002 through February 26, 2003). If you purchased VaxGen securities the Class Period and either lost money on the transactions or still hold the common stock, you may, if you meet certain other legal requirements, file a motion to serve as a lead plaintiff. You must file your motion no later than May 16, 2003.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 78u-4).
Much Shelist's history is one of experience, leadership and results. For more than 25 years, Much Shelist has represented plaintiffs in class action litigation in federal and state courts across the United States. The firm has successfully prosecuted cases involving securities fraud, antitrust violations, consumer fraud, unlawful business practices and insurance company fraud. Under Much Shelist's leadership, class members have obtained judgments and settlements in excess of $4 billion. Please contact the Much Shelist website for more information about the firm.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.