Suit Accuses Cephalon Of Distorting IGF-1 Data

5 February 1996

Cephalon has been accused of over-emphasizing the potential of its key drug, Myotrophin (insulin-like growth factor-1 or somatomedin-C) in a class action suit brought by shareholders in the company. The move follows the US Food and Drug Administration's decision on January 19 to prevent the company allowing expanded access to the drug, for the treatment of amyotrophic lateral sclerosis, citing disparate data in pivotal trials (Marketletter January 29).

In a statement, Greenfield & Rifkin LLP, the class action plaintiffs' lead counsel, noted that investor David Steinberg commenced the action in the US District Court for the Eastern District of Pennsylvania, naming the defendants in the litigation as Cephalon, its chairman, chief executive and president, Frank Baldino, and Frank Peacock, chief operating officer.

The suit claims that statements made by Cephalon between June 10, 1995 and January 19, 1996 concerning the efficacy of Myotrophin as a treatment for ALS were false. "The comments made by Cephalon and Dr Baldino in connection with the announcement of the Phase III study results...were intended to and did convey to the investing public the impression that the Phase III clinical study and the announced positive results thereof were reliable and indicative of the commercial viability of the drug," says the statement.

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