TherapeuticsMD, Inc. and two individuals are on the receiving end of a proposed class action that claims they misled investors by overstating the future success of a new drug. In July 2016, the company allegedly announced that it had filed a New Drug Application with the FDA and vouched for the drug’s promised effectiveness. In April 2017, however, the company supposedly admitted that the FDA was investigating the results of the defendant’s clinical tests on the new drug. Upon this news, TherapeuticsMD stock fell 19.48%, the suit claims. On May 8, 2017, the defendant announced that it had received a Complete Response Letter from the FDA expressing concerns about the long-term effects of the drug, and its stock fell another 10.49%, according to the complaint.
According to the suit, the defendant’s false representation of the new drug’s promised success caused stock prices to artificially increase and then drop when the truth was revealed. The plaintiff says he and other investors have suffered “significant losses and damages” and deserve to be repaid.