Apyx Medical Corporation f/k/a Bovie Medical Corporation
- Company Name
- Apyx Medical Corporation f/k/a Bovie Medical Corporation
- Stock Symbol
- Class Period
- August 1, 2018 to April 1, 2019
- Motion Deadline
- June 16, 2019
- Middle District of Florida
The complaint charges Apyx and its Chief Executive Officer with violations of the Securities Exchange Act of 1934. Apyx is a medical technology company that has developed a plasma-based surgical product for cutting, coagulation and ablation of soft tissue called J-Plasma. The Company markets and sells J-Plasma under the brand name Renuvion Cosmetic Technology for use in the cosmetic surgery market. The clinical study of J-Plasma for use in dermal resurfacing enrolled its final patients in May 2018 and was conducted at three investigational centers with 55 subjects. On December 21, 2018, the Company announced it had submitted a 510(k) application for regulatory clearance for the use of J-Plasma for dermal resurfacing procedures.
The complaint alleges that throughout the Class Period, defendants made false and misleading statements and/or failed to disclose material adverse facts about the Company’s business and prospects. Specifically, defendants failed to disclose that the clinical study of J-Plasma for use in dermal resurfacing had not met its primary efficacy endpoint and, as a result, the clinical study did not support the Company’s application for regulatory clearance and the Company was unlikely to receive regulatory approval of J-Plasma for dermal resurfacing. As a result of this information being withheld from the market, Apyx securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of nearly $9 per share.
On February 21, 2019, White Diamond Research released a report alleging that Apyx’s clinical study may have missed its primary endpoint. The report stated that “Apyx did not reveal the results of its clinical study on J-Plasma use for dermal resurfacing – a red flag that it may have missed its endpoints.” On this news, the price of Apyx stock fell $2.10 per share, or nearly 25%, to close at $6.40 per share on February 21, 2019.
Then on April 1, 2019, Apyx announced that it had withdrawn its 510(k) application for the use of J-Plasma for dermal resurfacing, citing concerns raised by the FDA. Apyx revealed that the FDA had “raised a number of questions and concerns related to superior clinical results from one investigational center as compared to the other two investigational centers in the study.” The FDA also “questioned the potential impact of protocol deviations at this investigational center including prophylactic use of methylprednisolone in all but five subjects treated.” Moreover, Apyx disclosed that the clinical “study did not meet the primary efficacy endpoint.” On this news, the price of Apyx stock fell $2.49 per share, or over 35%, to close at $4.46 per share on April 2, 2019.