Fortress Biotech, Inc. (FBIO) Misled Shareholders About the Viability of its Intravenous Tramadol Product
In December 2019, Fortress Biotech’s wholly owned subsidiary, Avenue Therapeutics, Inc., submitted a New Drug Application (“NDA”) for its intravenous Tramadol product to the U.S. Food and Drug Administration (“FDA”) for the management of moderate to moderately severe pain in adults in a medically supervised health care facility. During the class period, defendants made materially false and misleading statements regarding the viability of IV Tramadol by failing to disclose that IV Tramadol was not safe for the intended patient population, making it foreseeable that the FDA would not approve the NDA for IV Tramadol. On October 12, 2020, Avenue disclosed that it had received a Complete Response Letter from the FDA stating, “it cannot approve the application in its present form” because “IV tramadol, intended to treat patients in acute pain who require an opioid, is not safe for the intended patient population.” On this news, Fortress Biotech’s stock price fell $1.00 per share, or almost 24%, on October 12, 2020, and has yet to recover.
