Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Chiasma, Inc. (CHMA)


NEW YORK, June 10, 2016 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Chiasma, Inc. (“Chiasma” or the “Company”) (Nasdaq:CHMA) in the United States District Court for the District of Massachusetts on behalf of purchasers of Chiasma common stock between July 15, 2015 and April 17, 2016 inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”) and the Securities Act of 1933 (the “Securities Act”).

On or about July 15, 2016, Chiasma completed its IPO, issuing 6.4 million shares and raising net proceeds of approximately $102 million

According to the Complaint, Defendants made false and/or misleading statements and/or failed to disclose that:  (i) Chiasma’s Phase 3 clinical trial methodology for Mycapssa was not sufficient to demonstrate efficacy and secure FDA approval; (ii) Chiasma’s supervision of its suppliers was not sufficient to prevent deficiencies that would delay FDA approval of Mycapssa; and (iii) as a result of the foregoing, Chiasma’s public statements were materially false and misleading at all relevant times.

On April 18, 2016, before the market opened, the Company announced that the FDA had issued a Complete Response Letter regarding its NDA for Mycapssa, stating that the FDA did not believe the Company’s application had provided substantial evidence of efficacy to warrant approval and advising Chiasma that it would need to conduct another clinical trial in order to overcome this deficiency.  The FDA expressed concerns regarding certain aspects of the company’s single-arm, open-label Phase 3 clinical trial and strongly recommended that the company conduct a randomized, double-blind and controlled trial that enrolls patients from the United States and be of sufficiently long duration to ensure that control of disease activity is stable at the time point selected for the primary efficacy assessment.  In addition, the FDA advised that, during a recent site inspection, certain deficiencies were conveyed to the representative of one of Chiasma’s suppliers that would need to be resolved before approval. 

On this news, Chiasma’s share price fell $6.42, or 63.13%, to close at $3.75 on April 18, 2016.

If you wish to serve as lead plaintiff, you must move the Court no later than August 8, 2016.  A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.

Please visit our website at http://www.gme-law.com for more information about the firm.