Spectrum purports to be a biopharmaceutical company focused on acquiring, developing, and commercializing novel and targeted oncology therapies. On December 6, 2021, Spectrum issued a press release announcing it submitted a new drug application (“NDA”) to the U.S. Food and Drug Administration (“FDA”) for poziotinib’s use in patients with previously treated locally advanced or metastatic NSCLC with HER2 exon 20 insertion mutations. The NDA submission was based on purportedly “positive results of Cohort 2 from the ZENITH20 clinical trial, which assessed the safety and efficacy of poziotinib.”

Starting on September 20, 2022, before the market opened, investors began to learn the truth when the FDA Oncologic Drugs Advisory Committee (“ODAC”) released a briefing document in anticipation of its September 22, 2022 meeting with the defendants to review poziotinib. ODAC is an independent panel of experts that reviews and evaluates data concerning the efficacy and safety of marketed and investigational products for use in the treatment of cancer. Investors were surprised when, despite the company’s repeated representations during the Class Period that the data for ZENITH20 were positive, the ODAC briefing document disclosed not only negative data on the safety and efficacy of pozi, but also a failure by the company to enroll any patients in the required phase 3 confirmatory trial.

Then, on September 22, 2022, ODAC conducted its meeting concerning. During the meeting, ODAC voted 9-4 not to recommend poziotinib for Accelerated Approval.