NEW YORK CITY, Feb. 3, 2005 (PRIMEZONE) -- The law firm of Schor, Greenwald & Levy announces that a class action lawsuit has been commenced in the United States District Court for the District of New Jersey on behalf of all purchasers of Pharmos Corp. ("Pharmos" or the "Company") (Nasdaq:PARS) securities during the period from August 23, 2004 through December 17, 2004, inclusive (the "Class Period").
The action charges Pharmos and certain of its senior officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The alleged violations stem from the dissemination of false and misleading statements, which had the effect -- during the Class Period -- of artificially inflating the price of Pharmos's shares.
During the Class Period, defendants concealed the fact that Dexanabinol, the company's flagship drug product, which had completed enrollment for Phase III trials for Traumatic Brain Injury (TBI), was not exhibiting materially favorable reactions. Prior to disclosing this information to the public, Pharmos sold $16.75 million worth of stock in a private placement. Furthermore, the Company's CEO sold 20% of his holdings and its President sold almost 50% of his holdings. Such sales occurred after the close of Phase III enrollment and after the six month post-enrollment period concluded. On December 20, 2004, just weeks after insiders sold 400,000 shares of stock, they announced Dexanabinol was not found to be materially effective in Phase III testing. Furthermore, after years of touting the effectiveness of Dexanabinol, the Company abruptly ceased its effort to gain approval for Dexanabinol for TBI.
Schor Greenwald & Levy has experience in commercial litigation. The firm is prosecuting this action together with Kirby McInerney & Squire LLP, a New York-based law firm with a specialty, and decades of experience in securities class action litigation.
If you are a member of the class described above, you may, no later than 60 days from today, move the Court to serve as lead plaintiff of the class, if you so choose, pursuant to the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), 15 U.S.C. section 78u-4(a). A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. 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 seek appointment as a lead plaintiff. For more information about the case, its claims, and your rights, you can contact: Schor Greenwald & Levy or its U.S.-based co-counsel.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.