ROBBINS GELLER RUDMAN & DOWD LLP FILES CLASS ACTION SUIT AGAINST NOVAN, INC.
San Diego – November 7, 2017 – Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/novan/) today announced that a class action has been commenced on behalf of purchasers of Novan, Inc. (“Novan”) (NASDAQ:NOVN) stock during the period between September 21, 2016 and January 26, 2017 (the “Class Period”), including those who purchased Novan stock pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with the Company’s initial public offering on or about September 21, 2016 (“IPO”). This action was filed in the Middle District of North Carolina and is captioned Stefanowicz v. Novan, Inc., et al., No. 17-1015.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from November 3, 2017. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/novan/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Novan, certain of its officers and directors, and the underwriters of its IPO with violations of the Securities Act of 1933. It also charges Novan and its former CEO and CFO with violations of the Securities Exchange Act of 1934. Novan is a clinical-stage drug development company that focuses on the development and commercialization of nitric oxide-based therapies in dermatology. At all relevant times, Novan’s lead product candidate was SB204, a once-daily topical gel for the treatment of acne vulgaris.
The complaint alleges that in the IPO Registration Statement and Prospectus, and throughout the Class Period, defendants made materially false and misleading statements regarding Novan’s business and outlook, specifically regarding SB204. For example, defendants repeatedly stated that Novan had commenced and performed two identically designed Phase 3 clinical trials for SB204. Defendants’ statements falsely stated that the two Phase 3 clinical trials were identical and omitted specific facts as to why the two critical trials were, in fact, not identical. As a result of these false statements, the Company’s outlook and expected financial performance were not accurately represented to the market at all relevant times. As a result of defendants’ false statements during the Class Period, the price of Novan stock climbed significantly above the IPO price of $11.00 per share, reaching as high as $29.09 per share on December 7, 2016.
Before the market opened on January 27, 2017, Novan announced the top-line results of its two Phase 3 clinical trials of SB204. Although the drug hit all of its goals in one of the trials, it failed to beat a placebo in the other trial. On this news, the price of Novan stock dropped from a close of $18.70 per share on January 26, 2017, to a close of $4.86 per share on January 27, 2017, a decline of 74%.
Subsequent disclosures regarding SB204 demonstrated that the two Phase 3 clinical trials of SB204 were not identical. Following these disclosures, several executives left the Company. Then, on June 5, 2017, Novan announced that it was replacing its CEO and co-founder and that it was laying off 20% of its workforce. As a result, the price of Novan stock fell on June 6, 2017. Additional disclosures on August 2, 2017 revealed that Novan was retreating further from SB204, signaling a shift in Novan’s primary focus and causing the stock to drop more than 17% to close at $4.54 that day.
Plaintiff seeks to recover damages on behalf of all purchasers of Novan stock during the Class Period, including those who purchased Novan stock in connection with the Company’s IPO (the “Class”). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is widely recognized as a leading law firm advising and representing U.S. and international investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For the third consecutive year, the Firm ranked first in both the total amount recovered for investors and the number of shareholder class action recoveries in ISS's SCAS Top 50 Report. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm’s clients. Robbins Geller not only secures recoveries for defrauded investors, it also implements significant corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.