Foley Hoag Client Novelos Therapeutics, Inc. Closes Public Offering and Announces Success in Defense of Putative Class Action
June 14, 2012
Novelos Therapeutics, Inc. (OTCQX: NVLT), a pharmaceutical company developing novel drugs for the treatment and diagnosis of cancer, announced the closing of a public offering of 5,420,800 units for gross proceeds of $5,420,800. Each unit consisted of a share of Novelos Common Stock, a warrant exercisable for five years to purchase a half share of Common Stock at $1.25 per share, and a warrant exercisable for 90 days to purchase a share of Common Stock at $1.00 per share. Rodman & Renshaw, LLC acted as exclusive placement agent for the offering. Foley Hoag LLP represented Novelos.
“We congratulate the management of Novelos Therapeutics, Inc. on achieving another successful financial milestone, one which will help the company continue to develop innovative cancer related diagnostic and therapeutic products,” said Paul Bork, co-chair of Foley Hoag’s Corporate Finance and Securities practice group, who led Foley Hoag’s team in the representation.
Novelos also announced that on June 11, 2012, Judge Nathaniel M. Gorton dismissed with prejudice a second amended complaint in a putative federal securities fraud class action brought in the United States District Court for the District of Massachusetts originally in March 2010 entitled Boris Urman and Ramona McDonald v. Novelos Therapeutics, Inc. and Harry S. Palmin (Civil Action No. 10-10394-NMG). The plaintiffs alleged that the defendants made materially false and misleading statements and omissions regarding the progress of the Phase 3 clinical trial before the United States Food and Drug Administration of Novelos' oxidized glutathione compound, NOV-002, in application to non-small cell lung cancer. A first amended complaint had been dismissed without prejudice by Judge Gorton on June 23, 2011. In dismissing the second amended complaint, Judge Gorton concluded that the plaintiffs failed to allege sufficient facts to permit an inference of scienter and failed to allege loss causation adequately. Novelos and Mr. Palmin were defended by Foley Hoag’s Brandon F. White and Matthew C. Baltay.
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