A pharmaceutical company is facing a class action lawsuit for allegedly misleading investors about the viability of its clinical trials. On June 5, 2024, Scott Bishins filed a complaint in the United States District Court for the Eastern District of Pennsylvania against Marinus Pharmaceuticals, Inc., and its executives Scott Braunstein and Steven Pfanstiel.
The lawsuit alleges that Marinus Pharmaceuticals made materially false and misleading statements regarding the risks associated with their pivotal Phase 3 RAISE trial for ganaxolone, a treatment for refractory status epilepticus (RSE). According to the complaint, these misstatements were made between March 17, 2021, and May 7, 2024. The plaintiff claims that Marinus understated the risks involved in meeting pre-defined "early stopping" criteria for the trial and failed to disclose that failing to meet these criteria would halt further clinical trial enrollment.
Throughout this period, Marinus released several quarterly reports and annual filings with risk disclosures that purportedly misrepresented the likelihood of success in their clinical trials. For instance, in multiple SEC filings, including 12 separate filings from 2021-2024—the company assured investors about the progress and potential success of their RAISE trial without adequately disclosing the significant risks if early stopping criteria were not met.
Plaintiff Bishins contends that these omissions led to an inflated stock price during the class period. The truth began to emerge on April 15, when Marinus announced that it had not met early stopping criteria in its RAISE trial. This revelation caused Marinus' stock price to plummet by over $6 per share—a drop of approximately 82.7%. Further cost-cutting measures announced on May 8 included halting clinical trial enrollment in both RAISE and RAISE II trials and reducing workforce by about twenty percent.
Bishins is seeking compensatory damages for himself and other similarly affected investors who purchased publicly traded Marinus securities during this period. The suit accuses Marinus Pharmaceuticals of violating Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as well as Rule 10b-5 promulgated thereunder by making false or misleading statements or omitting material facts necessary to make those statements not misleading.
Representing Bishins are attorneys from The Rosen Law Firm P.A., including Jacob A. Goldberg and Phillip Kim from New York City along with Brian Schall from The Schall Law Firm based in Los Angeles. The case has been assigned Case ID: 2:24-cv-02430-JP.