OvaScience, Inc. (Nasdaq: OVAS)
The complaint charges OvaScience, certain of its officers and/or directors and the underwriters of OvaScience’s January 8, 2015 secondary offering (the “Offering”) with violations of the Securities Act of 1933 (“1933 Act”). OvaScience is a life science company that engages in the discovery, development and commercialization of new treatments for infertility. The Company is focused on developing fertility treatment options that enhance the health of eggs for use in in vitro fertilization (“IVF”) treatments. The Company’s Autologous Germline Mitochondrial Energy Transfer (“AUGMENT”) treatment, designed to improve the energy and health of a woman’s eggs by using mitochondria from a woman’s egg precursor cells, is available in certain IVF clinics in select international regions.
In the Offering, OvaScience sold 2.3 million shares of common stock at $50 per share (not including the overallotment), for gross proceeds of $115 million, pursuant to a Registration Statement, as amended, a January 6, 2015 Preliminary Prospectus Supplement and a January 8, 2015 Prospectus Supplement (the “Offering Materials”) issued in connection with the Offering.
The complaint alleges that defendants violated the 1933 Act by issuing false and misleading statements and/or failing to disclose adverse information to investors regarding OvaScience’s business and prospects in the Offering Materials for the Offering. Specifically, the complaint alleges the Offering Materials failed to disclose, among other things, that the science behind the AUGMENT treatment was untested and in doubt; that patients that had received the AUGMENT procedure in 2014 did not achieve a pregnancy success rate that was significantly higher than the rate achieved without the Company’s AUGMENT procedure; that the Company had not chosen to undertake its studies outside of the United States, but rather was forced to, as it did not want to have to meet stringent and expensive federal regulations; and that the Company was far from being profitable, or even approaching profitability. As a result of these false statements and/or omissions in the Offering Materials, the price of OvaScience common stock was artificially inflated to $50 per share in the Offering.
Beginning in March 2015, the truth regarding the AUGMENT procedure began to emerge when the Company announced the results from IVF clinics utilizing the procedure, reporting success rates that were comparable to or lower than those achieved for clinics using IVF without AUGMENT. Following this news, the price of OvaScience shares fell over 35%. As the bad news about the results of the AUGMENT clinical trials continued to be reveal throughout the rest of 2015, the price of AUGMENT shares declined further, falling to $8.57 per share by September 29, 2015, on the news that, contrary to what investors had been led to expect, OvaScience did “not expect to meet the 2015 goal of 1,000 AUGMENT treatment cycles.”
Since the Offering, the price of OvaScience common stock has continued to decline, falling by over 97% to below $1.50 per share by November 2017.
If you are a current shareholder and purchased stock pursuant to the January 8, 2015 secondary offering, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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