ElectroCore, Inc. (ECOR) Accused of Misleading Shareholders
According to a class action complaint for alleged violations of the Securities Exchange Act of 1933, in June 2018, electroCore held its initial public offering (“IPO”) offering 5,980,000 shares of common stock for $15.00 per share and receiving proceeds of approximately $79.5 million. In its Registration Statement, electroCore touted the competitive strengths of its innovative gammaCore product and addressed plans to commercialize the product as a leading headache therapy. However, despite electroCore’s representations, gammaCore did not possess competitive advantages for migraine and headache therapy and was unlikely to be adopted by physicians and patients over existing treatments. After multiple statements of disappointing financial results, on September 25, 2019, electroCore revealed that the U.S. Food and Drug Administration requested more information before approving electroCore’s submission for the use of gammaCore. On this news, electroCore’s share price fell 23% to close at $2.57, an almost 83% decline from its IPO price. The stock has yet to recover.
