Delcath hit with investor lawsuit after FDA harangue

As Delcath ($DCTH) reels from an FDA panel's 16-0 condemnation of its cancer-treating device, irked investors are lining up to sue, claiming the company withheld safety information about the technology to inflate its share price.

In a class action lawsuit filed in New York, plaintiffs say Delcath misrepresented or failed to disclose adverse events tied to the Melblez system, a drug-device combo designed to treat eye cancer that has spread to the liver. In April, an FDA advisory panel voted unanimously that the device's benefits did not outweigh its risks, citing a high rate of treatment-related mortality and delaying a final approval decision until Sept. 13.

The company's shares tanked more than 40% the next day, and the plaintiffs are looking for investors who bought Delcath stock between April 21, 2010, and May 2, 2013, to join in on the lawsuit.

Delcath said in a statement that it does not comment on pending litigation.

The company's device uses a system of filters and pumps to cordon off the liver and douse it with the chemotherapy melphalan, but the FDA took serious issue with those filters, saying they leaked the toxic therapy into the bloodstream and led to about 7% of patients dying of adverse events like liver failure and gastrointestinal bleeding after treatment.

Delcath wants to switch to a new filter it says is more effective, but the FDA wants another randomized clinical trial before allowing the swap, and that time-consuming process would likely postpone a reapplication long past Sept. 13.

- read more

Editor's note: This story has been updated to include a statement from Delcath.

Suggested Articles

Sherlock Biosciences teamed up with Cepheid to help develop its CRISPR-based molecular diagnostic tech in oncology, infections and the coronavirus.

The spine surgery company ATEC has moved to acquire Paris-based EOS imaging, makers of FDA-cleared scanners and 3D orthopedic planning software.

Digital molecule designer Insilico Medicine has launched a new preclinical research program focused on treatments for brain cancer.