UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY. Plaintiff(s), ) ) v. ) ) ) Defendants. )

Transcription

1 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 1 of 32 PageID: 1 LITE DEPALMA GREENBERG, LLC Bruce D. Greenberg Jeffrey A. Shooman Two Gateway Center, Suite 1201 Newark, NJ Telephone: (973) Facsimile: (973) bgreenberg@litedepalma.com jshooman@litedepalma.com UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY ) MICHAEL KRZYZAK, Individually and on Behalf of All Others Similarly Situated ) ) Plaintiff(s), ) ) v. ) ) ) ) REGADO BIOSCIENCES, INC., DAVID J. MAZZO, R. DON ELSEY, ) ) and CHRISTOPHER E. COURTS ) ) Defendants. ) Civil Action No. CLASS ACTION COMPLAINT FOR VIOLATION OF THE FEDERAL SECURITIES LAWS DEMAND FOR JURY TRIAL Plaintiff Michael Krzyzak ( Plaintiff ), individually and on behalf of all other persons similarly situated, by his undersigned attorneys, for his complaint against defendants, alleges the following based upon personal knowledge as to himself and his own acts, and information and belief as to all other matters, based upon, inter alia, the investigation conducted by and through his attorneys, which

2 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 2 of 32 PageID: 2 included, among other things, a review of the defendants public documents, conference calls and announcements made by defendants, United States Securities and Exchange Commission ( SEC ) filings, wire and press releases published by and regarding Regado Biosciences, Inc., ( Regado or the Company ), analysts reports and advisories about the Company, and information readily obtainable on the Internet. Plaintiff believes that substantial evidentiary support will exist for the allegations set forth herein after a reasonable opportunity for discovery. NATURE OF THE ACTION 1. This is a federal securities class action brought on behalf of a class consisting of all persons and entities, other than Defendants (defined below) and their affiliates, who purchased the securities of Regado from August 22, 2013 to July 9, 2014, inclusive (the Class Period ). Plaintiff seeks to pursue remedies against Regado and certain of its officers and directors for violations of the federal securities laws under the Securities Exchange Act of 1934 (the Exchange Act ). 2. Defendant Regado is a biopharmaceutical company that focuses on the discovery and development of antithrombotic drug systems for acute and subacute cardiovascular and other indications. According to the Company, Regado s actively controllable product candidates have the potential to improve patient outcomes and enhance the patient experience, provide direct therapeutic control to physicians and reduce overall treatment costs. The Company was formerly known 2

3 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 3 of 32 PageID: 3 as Quartet Biosciences, Inc. and changed its name to Regado Biosciences, Inc. in March Regado was founded in 2001 and is headquartered in Basking Ridge, New Jersey. 3. The Company s lead product candidate, RevolixysTM Kit (known as REG1 ), is a two-component system consisting of pegnivacogin, an anticoagulant aptamer specifically targeting coagulation Factor IXa, and its complementary oligonucleotide active control agent, anivamersen. REG1 is being evaluated in the REGULATE-PCI trial, a worldwide Phase 3 trial, which planned to enroll 13,200 patients with acute coronary syndromes ( ACS ) undergoing percutaneous coronary intervention ( PCI ), a hospital-based procedure used to mechanically open or widen obstructed coronary arteries. 4. However, throughout the Class Period, Defendants made false and/or misleading statements, and failed to disclose material adverse facts about the Company s business, operations, prospects and performance. Specifically, during the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the danger and frequency of allergic reactions experienced by subjects in the REG1 Phase 3 trial were significant enough to derail the trial; (ii) the allergic reactions were of such a serious nature and/or frequency that the Data Safety Monitoring Board ( DSMB ) and FDA would ultimately be required to place the clinical trial on hold; and (iii) and as a result of the above, the 3

4 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 4 of 32 PageID: 4 Company s financial statements were materially false and misleading at all relevant times. 5. On July 3, 2014, the Company announced that the DSMB overseeing the REG1 clinical trial commenced an unplanned review to determine the safety and treatment benefit-risk ratio of all the 3,234 patients who had been enrolled in the study so far. As a result, Regado stopped enrolling patients in the study and announced that it would suspend the trial until the analysis was complete. 6. On the news, Regado stock fell $3.95, or over 58%, on extremely heavy volume, to close at $2.81 on July 3, Thereafter, on July 9, 2014, after the market closed, the Company announced that, further to their decision to voluntarily pause enrollment in the REG1 study, the FDA informed the Company that a clinical hold had been placed on all patient enrollment and dosing in the ongoing Phase 3 trial. 8. On the news, Regado stock fell $0.20, or over 7%, on unusually heavy volume, on intraday trading on July As a result of Defendants wrongful acts and omissions, and the precipitous decline in the market value of the Company s securities, Plaintiff and other Class members have suffered significant losses and damages. 4

5 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 5 of 32 PageID: 5 JURISDICTION AND VENUE 10. The claims asserted herein arise under and pursuant to 10(b) and 20(a) of the Exchange Act (15 U.S.C. 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17 C.F.R b-5). 11. This Court has jurisdiction over the subject matter of this action under 28 U.S.C and 27 of the Exchange Act. 12. Venue is proper in this District pursuant to 27 of the Exchange Act (15 U.S.C. 78aa) and 28 U.S.C. 1391(b) as a significant portion of the defendants actions, and the subsequent damages, took place within this District. 13. In connection with the acts, conduct and other wrongs alleged in this Complaint, defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including but not limited to, the United States mail, interstate telephone communications and the facilities of the national securities exchange. PARTIES 14. Plaintiff, as set forth in the accompanying Certification, which is incorporated by reference herein, purchased the common stock of Regado at artificially inflated prices during the Class Period and was damaged upon the revelation of the alleged corrective disclosures. 5

6 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 6 of 32 PageID: Defendant Regado is a Delaware corporation with its principal executive offices located at 120 Mountain View Boulevard, Basking Ridge, New Jersey Regado s common stock trades on the NASDAQ under the ticker symbol RDGO. 16. Defendant David J. Mazzo ( Mazzo ) has served at all relevant times as the Company s Chief Executive Officer. 17. Defendant Christopher E. Courts ( Courts ) has served at all relevant times as the Company s Vice President of Finance, and served as the Company s Principal Financial & Accounting Officer until May 5, Defendant R. Don Elsey ( Elsey ) was appointed as the Company s Chief Financial Officer on May 5, Defendants referenced above in are sometimes referred to herein, collectively, as the Individual Defendants. 20. Defendant Regado and the Individual Defendants are referred to herein, collectively, as the Defendants. SUBSTANTIVE ALLEGATIONS Background 21. Regado Biosciences, Inc. is a biopharmaceutical company that focuses on the discovery and development of antithrombotic drug systems for acute and sub-acute cardiovascular and other indications. The Company s lead product 6

7 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 7 of 32 PageID: 7 candidate includes REG1, an anticoagulant that is in a Phase 3 clinical trial for use in patients with various cardiovascular conditions undergoing percutaneous coronary intervention. Its other product candidates under development also comprise REG2, which is in a Phase 1 clinical trial for the treatment of venous thrombosis indication; and REG3, a preclinical stage antiplatelet therapy consisting of glycoprotein VI inhibitor for diabetic vasculopathy and other inflammatory diseases. Materially False and Misleading Statements Issued During the Period 22. The Class Period begins on August 22, 2013, the day of the Company s Initial Public Offering ( IPO ). On that day the Company filed a Final Prospectus on Form 424B4 ( IPO Prospectus ), in connection with the IPO. 23. In the IPO Prospectus, the Company stated, in part: Our Lead Product Candidate REG1 is an actively controllable anticoagulant targeting coagulation Factor IXa for use in patients with a wide variety of acute coronary syndromes, or ACS, undergoing a percutaneous coronary intervention, or PCI, a hospital-based procedure used to mechanically open or widen obstructed coronary arteries. REG1 consists of pegnivacogin, an anticoagulant aptamer, and its specific active control agent, anivamersen. Pegnivacogin achieves its maximal anticoagulant effect within five minutes of injection. Anivamersen is an oligonucleotide, a biological polymer consisting of a relatively small number of nucleotides chemically bound in a linear sequence that forms a chain-like structure, or strand, and has no pharmacologic activity other than to bind to pegnivacogin. Anivamersen rapidly and 7

8 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 8 of 32 PageID: 8 precisely reduces or eliminates the anticoagulant activity of pegnivacogin. Both pegnivacogin and anivamersen are administered by intravenous bolus injection using weight-based dosing. By adjusting the dose of anivamersen relative to pegnivacogin, the anticoagulant effect of pegnivacogin can be precisely and rapidly controlled or eliminated. The unprecedented level of control that REG1 provides permits physicians to achieve levels of anticoagulation in patients that would be unsafe to use with existing anticoagulants. PCI procedures involve a significant risk of ischemic events, including death, stroke, myocardial infarction and the need for revascularization of the artery. Because of this risk, powerful anticoagulant drugs are administered prior to and throughout the PCI procedure. However, anticoagulants create a significant risk of major bleeding events. As a result, interventional cardiologists are forced to make a compromising medical decision because they lack the means to simultaneously reduce the risks of ischemic and major bleeding events. REG1 is the first and only anticoagulant to demonstrate a reduction in both ischemic and major bleeding events in a clinical trial for PCI. In our randomized, partially blinded, doseranging Phase 2b trial involving 640 subjects, or the RADAR trial, when compared to standard of care heparin, REG1 demonstrated both a rapid and predictable anticoagulant effect and the ability to precisely modulate or eliminate that effect in real time. REG1 also demonstrated the following important clinical and pharmacoeconomic benefits: an approximate 66.0% reduction in ischemic events; a reduction of up to 60.0% in major bleeding events; a substantial reduction in time from catheterization to catheter sheath removal from a median of 3.8 hours to a median of one hour; 8

9 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 9 of 32 PageID: 9 a substantial reduction in time from completion of the PCI procedure to catheter sheath removal from a median of three hours to a median of 24 minutes; and a substantial reduction in time from completion of the PCI procedure to catheter sheath removal from a median of three hours to a median of 24 minutes; and a substantial reduction in the time subjects were required to remain still following catheter sheath removal from a median of 5.7 hours to a median of 2.8 hours. Based on these clinical results and after discussion with the U.S. Food and Drug Administration, or FDA, and the European Medicines Agency, we intend to initiate a single, open-label, 13,200 subject Phase 3 trial of REG1, or the REGULATE-PCI trial, in the second half of REGULATE-PCI, if successful, will serve as the basis for product registration applications worldwide. *** Reduced ischemic events. REG1 allows a higher level of anticoagulation to be used safely during PCI, which will reduce the occurrence of ischemic events. Reduced major bleeding events. REG1 s anticoagulant effect can be modulated or eliminated at the end of PCI which will reduce the risk of major bleeding events. Precise and predictable dosing. Because REG1 s effect is independent of an individual patient s metabolism or health, dosing is precise and predictable, thereby eliminating the need for time-consuming and costly patient monitoring during and after PCI. Broad applicability REG1 s use in PCI is unrestricted for high risk patients such as those with kidney or liver impairment. 9

10 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 10 of 32 PageID: 10 Pharmacoeconomic benefits. REG1 will reduce overall treatment costs by reducing ischemic and major bleeding events, shortening procedure and recovery times, reducing the need for procedure-related follow-up interventions and re-hospitalizations, increasing staff and facility efficiency and improving the patient experience. 24. On November 8, 2013, the Company filed a quarterly report on Form 10-Q with the SEC, signed by Defendants Mazzo and Courts, stating financial and operating results for the period ended September 30, The Company reported a net loss of $11.42 million or $1.43 per diluted share on no revenue, compared to a net loss of $2.72 million or $12.28 per diluted share on no revenue for the same period in the prior year. In addition, the Form 10-Q contained signed certifications pursuant to the Sarbanes-Oxley Act of 2002 ( SOX ) by defendants Mazzo and Courts stating that the financial information contained in the Form 10-Q was accurate, and disclosed any material changes to the Company s internal control over financial reporting. 25. Regarding the Company s leading drug candidate, REG1, the Form 10-Q stated, in part: Our lead product candidate, REG1, is a two-component system consisting of pegnivacogin, an anticoagulant aptamer specifically targeting coagulation Factor IXa, and its complementary oligonucleotide active control agent, anivamersen. REG1 is being developed for use in patients with a wide variety of acute coronary syndromes, or ACS, undergoing a percutaneous coronary intervention, or PCI, a hospital-based procedure used to mechanically open or widen 10

11 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 11 of 32 PageID: 11 obstructed coronary arteries. Our actively controllable product candidates have the potential to improve patient outcomes, enhance the patient experience and reduce overall treatment costs. In September 2013, we commenced our single, openlabel, 13,200 subjects Phase 3 trial of REG1 in patients undergoing PCI (excluding ST elevated myocardial infarction, or STEMI), or the REGULATE-PCI trial. 26. On March 12, 2014, the Company filed an annual report on Form 10-K with the SEC, signed by defendants Mazzo and Courts, stating financial and operating results for the year ended December 31, The Company reported a net loss of $34.44 million or $4.59 per diluted share on no revenue, compared to a net loss of $13.06 million or $59.03 per diluted share on no revenue for the prior year. In addition, the Form 10-K contained signed certifications pursuant to SOX by defendants Mazzo and Courts stating that the financial information contained in the Form 10-K was accurate, and disclosed any material changes to the Company s internal control over financial reporting. 27. Regarding the Company s leading drug candidate, REG1, the Form 10-K stated, in part: Our lead product candidate, REG1, consists of pegnivacogin, a highly potent and selective anticoagulant, and anivamersen, its specific active control agent. We are developing REG1 as an anticoagulant for use in patients with a wide variety of cardiovascular conditions undergoing percutaneous coronary intervention, or PCI, a hospital-based procedure used to mechanically open or widen obstructed coronary arteries. Interventional cardiologists performing PCIs must consider the risk of major bleeding events in determining the level of 11

12 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 12 of 32 PageID: 12 anticoagulation administered to patients to prevent ischemic events, including death, stroke, myocardial infarction, or MI, or the need for revascularization of the artery. As the anticoagulant effect of existing drugs persists long after administration, intervention cardiologists are forced to make a compromising medical decision because they lack the means to simultaneously reduce the risks of ischemic and major bleeding events. In 2005, we filed an investigational new drug application, or IND, for the use of REG1 in this initial indication. In March 2014, we announced that REG1 has received Fast Track designation from the U.S. Food and Drug Administration, or FDA, for anticoagulant therapy to be used in patients with coronary artery disease during PCI. We believe that REG1 has the potential to become the standard of care for anticoagulation therapy for patients undergoing PCI and other cardiovascular procedures because it gives the physician precise, on-demand control over anticoagulation levels. REG1 is the first and only anticoagulant to demonstrate a reduction in both ischemic and major bleeding events in a clinical trial for PCI. In our clinical trials, REG1 demonstrated a rapid and predictable anticoagulant effect that was precisely modulated or completely reversible in real time. In our randomized, partially blinded, dose-ranging Phase 2b trial involving 640 subjects, or the RADAR trial, when compared to standard of care heparin, REG1 demonstrated both a rapid and predictable anticoagulant effect and ability to precisely modulate or eliminate that effect in real time. REG1 also demonstrated the following important clinical and pharmacoeconomic benefits: an approximate 66.0% reduction in ischemic events; a reduction of up to 60.0% in major bleeding events; a substantial reduction in time from catheterization to catheter sheath removal from a median of 3.8 hours to a median of one hour; 12

13 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 13 of 32 PageID: 13 a substantial reduction in time of completion of the PCI procedure to catheter sheath removal from a median of three hours to a median of 24 minutes; and a substantial reduction in the time patients were required to remain still following catheter sheath removal from a median of 5.7 hours to a median of 2.8 hours. Based on these clinical results and after discussion with the FDA and the European Medicines Agency, or EMEA, in September of 2013, we initiated a single, open-label, 13,200 subject Phase 3 trial of REG1, or the REGULATE-PCI trial, in patients undergoing PCI procedures other than for the treatment of ST elevation myocardial infarctions. REGULATE-PCI, if successful, will serve as the basis for product registration applications worldwide. We believe that REG1 has potential use in other PCI and interventional cardiovascular procedures, such as open heart surgery, or OHS, PCI as a treatment for ST segment elevation myocardial infarction as well as transcatheter aortic valve replacement or implantation, or TAVI. * * * We intend to seek initial regulatory approval for the use of REG1 in all PCI procedures other than in the treatment of STEMI. Based on 2013 statistics published by the American Heart Association, we believe that approximately 2.5 million PCI procedures were performed worldwide in 2013 in this segment of the market. We anticipate that this segment of the market will grow faster than the overall PCI market as a result of an ongoing clinical shift toward less invasive cardiovascular procedures. 28. Moreover, the Form 10-K contained the following statements regarding allergic reactions by subjects in the REG1 trial: Late in the trial, three REG1 subjects experienced severe allergic events. These events occurred 3 to 20 minutes after administration of pegnivacogin and ranged from a subject with a mild skin reaction to one subject who needed extended 13

14 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 14 of 32 PageID: 14 hemodynamic support. Based on a blinded assessment of bleeding and ischemic events at that time, it was determined that a sufficient number of endpoint events had occurred to meet the objectives of the trial and the trial was deemed complete. Following the occurrence of the allergic events, a detailed analysis of possible causes was performed. We determined that all three subjects were experiencing activation of their immunological system prior to receiving REG1 treatment and had a history of allergic reactions. We also determined that the REG1 used in these patients conformed to our specifications, was not contaminated, mishandled or stored incorrectly and that no changes to the formulation had occurred. Based on non-human primate studies, we concluded that there was no clinical or biomarker evidence of intravascular immune pathway activation. We also re-examined the complete REG1 clinical database and found no evidence of serious allergic reactions within the remainder of the REG1 development program. Following completion of our investigations and submission of a risk minimization action plan, the FDA and the EMEA agreed that we could proceed to a Phase 3 trial and that no additional exclusion criteria, and no special dosing, pretreatment or pre-screening requirements were necessary. Additionally, in REGULATE-PCI investigators will receive training on the identification and proper treatment of allergic reactions and blood samples from all subjects will be collected and stored for future reference in the event they are needed for analysis. 29. On April 3, 2014, the Company issued a press release and filed a Form 8-K with the SEC, announcing that it had achieved a 1,000 patient milestone in the Phase 3 trial of REG1. In the press release the Company stated, in part: Regado Biosciences, Inc. (Nasdaq: RGDO), a biopharmaceutical company leading the development of actively controllable therapeutics for acute care cardiovascular indications, today announced that after achieving the 1,000- patient enrollment milestone, enrollment in the REGULATE- 14

15 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 15 of 32 PageID: 15 PCI trial has been extended to the N-STEMI (non ST-elevated myocardial infarction) patients to include the planned all comers percutaneous coronary intervention (PCI) patient population described in the trial protocol. REGULATE-PCI is Regado s Phase 3 trial comparing REG1 to bivalirudin for superiority in reducing ischemic events in patients undergoing PCI, excluding those with ST-elevated myocardial infarction (STEMI). This development program was recently granted Fast Track designation by the FDA. I am pleased with the enthusiasm that the investigator community is showing for REG1 as evidenced by the rapid enrollment rate of the trial, said Roxana Mehran, MD, Co- Principal Investigator on the REGULATE-PCI trial and Professor of Medicine at the Icahn School of Medicine at Mount Sinai. Using Regado s unique aptamer technology, REG1 offers controlled anticoagulation and rapid reversal for the practitioner. REG1 has the potential to become the new standard of care in PCI and possibly other acute care cardiovascular indications. It promises to be the first and only anticoagulant that reduces ischemic complications without an increase in bleeding while also reducing healthcare costs associated with the procedure. 30. On May 1, 2014, the Company issued a press release and filed a Form 8-K with the SEC, announcing the appointment of R. Don Elsey as Senior Vice President of Finance, and Chief Financial Officer, effective as of May 5, On May 13, 2014, the Company filed a quarterly report on Form 10-Q with the SEC, signed by defendants Mazzo and Elsey, stating financial and operating results for the period ended March 31, The Company reported a net loss of $15.85 million or $1.30 per diluted share on no revenue, compared to a net loss of $3.29 million or $14.87 per diluted share on no revenue for the same 15

16 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 16 of 32 PageID: 16 period in the prior year. In addition, the Form 10-Q contained signed certifications pursuant to SOX by Defendants Mazzo and Elsey, stating that the financial information contained in the Form 10-Q was accurate, and disclosed any material changes to the Company s internal control over financial reporting. 32. Regarding the Company s leading drug candidate, REG1, the Form 10-Q stated, in part: Our lead product candidate, RevolixysTM Kit (formerly known as REG1), consists of pegnivacogin, a highly potent and selective anticoagulant, and anivamersen, its specific active control agent. We are developing Revolixys as an anticoagulant for use in patients with a wide variety of cardiovascular conditions undergoing percutaneous coronary intervention, or PCI, a hospital-based procedure used to mechanically open or widen obstructed coronary arteries. Interventional cardiologists performing PCIs must consider the risk of major bleeding events in determining the level of anticoagulation administered to patients to prevent ischemic events, including death, stroke, myocardial infarction, or MI, or the need for revascularization of the artery. As the anticoagulant effect of existing drugs persists long after administration, interventional cardiologists are forced to make a compromising medical decision because they lack the means to simultaneously reduce the risks of ischemic and major bleeding events. In 2005, we filed an investigational new drug application, or IND, for the use of Revolixys in this initial indication. In March 2014, we announced that Revolixys received Fast Track designation from the U.S. Food and Drug Administration, or FDA, for anticoagulant therapy to be used in patients with coronary artery disease during PCI. We believe that Revolixys has the potential to become the standard of care for anticoagulation therapy for patients undergoing PCI and other cardiovascular procedures because it 16

17 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 17 of 32 PageID: 17 is designed to give the physician precise, on-demand control over anticoagulation levels. Revolixys is the first and only anticoagulant to demonstrate a reduction in both ischemic and major bleeding events in a clinical trial for PCI. In our clinical trials, Revolixys demonstrated a rapid and predictable anticoagulant effect that was precisely modulated or completely reversible in real time. In our randomized, partially blinded, dose-ranging Phase 2b trial involving 640 subjects, or the RADAR trial, when compared to standard of care heparin, Revolixys demonstrated both a rapid and predictable anticoagulant effect and ability to precisely modulate or eliminate that effect in real time. Revolixys also demonstrated the following important clinical and pharmacoeconomic benefits: an approximate 66.0% reduction in ischemic events; a reduction of up to 60.0% in major bleeding events; a substantial reduction in time from catheterization to catheter sheath removal from a median of 3.8 hours to a median of one hour; a substantial reduction in time of completion of the PCI procedure to catheter sheath removal from a median of three hours to a median of 24 minutes; and a substantial reduction in the time patients were required to remain still following catheter sheath removal from a median of 5.7 hours to a median of 2.8 hours. Based on these clinical results and after discussion with the U.S. Food and Drug Administration, or FDA, and the European Medicines Agency, or EMEA, in September of 2013, we initiated a single, open-label, 13,200 subject Phase 3 trial of RevolixysTM Kit, or the REGULATE-PCI trial, in patients undergoing PCI procedures other than for the treatment of ST elevation myocardial infarctions. In March 2014, we announced that Revolixys received Fast Track designation from the FDA for anticoagulant therapy to be used in patients with coronary artery disease during PCI. REGULATE-PCI, if successful, will 17

18 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 18 of 32 PageID: 18 serve as the basis for product registration applications worldwide. We believe that Revolixys has potential use in other PCI and interventional cardiovascular procedures, such as open heart surgery, or OHS, PCI as a treatment for ST segment elevation myocardial infarction as well as transcatheter aortic valve replacement or implantation, or TAVI. 33. On May 14, 2014, the Company issued a press release and filed a Form 8-K with the SEC reiterating the Company s previously announced quarterly financial results and financial position. In the press release, the Company stated, in part: As announced in April, we were very pleased to reach the first enrollment milestone in our global REGULATE-PCI trial, which allowed us to expand our efforts and enroll all comers into the trial, and include NSTEMI patients. The study continues to progress as planned, and we expect to continue to meet our planned enrollment milestones later this year, David J. Mazzo, Ph.D., Chief Executive Officer of Regado Biosciences, commented. We believe that Revolixys will be a category-leading anticoagulant that has the potential to improve patient outcomes by providing direct therapeutic control to physicians in clinical settings. By designating Revolixys as a Fast Track Development Program, I believe that the FDA recognizes that there is a significant need for this treatment option. * * * Revolixys Phase 3 trial reached 1,000 patient milestone: On April 2, 2014, Regado announced that 1,000 patients had been enrolled in the REGULATE-PCI trial, and enrollment was extended to include the planned all comers percutaneous coronary intervention (PCI) patient population described in the trial protocol. * * * 18

19 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 19 of 32 PageID: 19 Revolixys designated by the FDA as a Fast Track Development Program: In March of 2014, Revolixys for use in PCI was given Fast Track designation by the FDA. The FDA s Fast Track process is designed to facilitate the development and expedite the review of drugs to treat serious conditions that fill an unmet medical need, with the overall goal of getting new drugs to patients earlier. 34. The statements in above were materially false and/or misleading because they misrepresented and/or failed to disclose that: (i) the danger and frequency of allergic reactions experienced by subjects in the REG1 Phase 3 trial were significant enough to derail the trial; (ii) the allergic reactions were of such a serious nature and/or frequency that the DSMB and FDA would ultimately be required to place the trial on clinical hold; and (iii) and as a result of the above, the Company s financial statements were materially false and misleading at all relevant times. The Truth Emerges 35. On July 3, 2014, the Company issued a press release and filed a Form 8-K with the SEC announcing that that the DSMB had initiated an unplanned review of data from the REGULATE-PCI trial. The press release stated, in part: Regado Biosciences, Inc. (Nasdaq: RGDO), a biopharmaceutical company focused on the Phase 3 clinical development of RevolixysTM Kit (previously known as REG1), its first-in-class, actively controllable antithrombotic drug system, today announced that the Data Safety Monitoring Board (DSMB) has initiated an unplanned review of data from the REGULATE-PCI trial. Patient enrollment has been paused until the DSMB has completed its analysis and communicated 19

20 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 20 of 32 PageID: 20 its recommendations, which are anticipated within the next 8 weeks. The DSMB will conduct a full analysis of safety and treatment benefit-risk ratio of all patients enrolled to date (3234) with a focus on serious adverse events related to allergic reactions. Regado and the trial s academic leadership have been and will remain blinded to study results during this period. 36. On this news, Regado stock fell $3.95, or over 58%, on extremely heavy volume, to close at $2.81 on July 3, Thereafter, on July 9, 2014, Regado announced that, further to their decision to voluntarily pause enrollment in the REG1 trial, the FDA informed the Company that a clinical hold would be placed on all patient enrollment and dosing of either study drug in the ongoing Phase 3 REG1 trial. According to the Company, this action was taken to formalize the involvement of the FDA in any decision to re-initiate enrollment and dosing in the trial in the future. 38. On this news, Regado stock fell $0.20, or over 7%, on unusually heavy volume, on intraday trading on July As a result of Defendants wrongful acts and omissions, and the precipitous decline in the market value of the Company s securities, Plaintiff and other Class members have suffered significant losses and damages. PLAINTIFF CLASS ACTION ALLEGATIONS 40. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who 20

21 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 21 of 32 PageID: 21 purchased or otherwise acquired Regado securities during the Class Period (the Class ); and were damaged upon the revelation of the alleged corrective disclosures. Excluded from the Class are Defendants herein, the officers and directors of the Company, at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns, any entity in which Defendants have or had a controlling interest, and any judicial officer who handles this matter and the immediate family of any such judicial officer. 41. The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, Regado securities were actively traded on the NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time and can be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds or thousands of members in the proposed Class. Record owners and other members of the Class may be identified from records maintained by Regado or its transfer agent and may be notified of the pendency of this action by mail, using the form of notice similar to that customarily used in securities class actions. 42. Plaintiff s claims are typical of the claims of the members of the Class as all members of the Class are similarly affected by Defendants wrongful conduct in violation of federal law that is complained of herein. 21

22 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 22 of 32 PageID: Plaintiff will fairly and adequately protect the interests of the members of the Class and has retained counsel competent and experienced in class and securities litigation. Plaintiff has no interests antagonistic to or in conflict with those of the Class. 44. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are: whether the federal securities laws were violated by Defendants acts as alleged herein; whether statements made by Defendants to the investing public during the Class Period misrepresented material facts about the business, operations and management of Regado; whether the Individual Defendants caused Regado to issue false and misleading financial statements during the Class Period; whether Defendants acted knowingly or recklessly in issuing false and misleading financial statements; whether the prices of Regado securities during the Class Period were artificially inflated because of the Defendants conduct complained of herein; and, whether the members of the Class have sustained damages and, if so, what is the proper measure of damages. 45. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members 22

23 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 23 of 32 PageID: 23 may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action. 46. Plaintiff will rely, in part, upon the presumption of reliance established by the fraud-on-the-market doctrine in that: Defendants made public misrepresentations or failed to disclose material facts during the Class Period; the omissions and misrepresentations were material; Regado securities are traded in efficient markets; the Company s shares were liquid and traded with moderate to heavy volume during the Class Period; the Company traded on the NASDAQ, and was covered by multiple analysts; the misrepresentations and omissions alleged would tend to induce a reasonable investor to misjudge the value of the Company s securities; and Plaintiff and members of the Class purchased and/or sold Regado securities between the time the Defendants failed to disclose or misrepresented material facts and the time the true facts were disclosed, without knowledge of the omitted or misrepresented facts. 47. Based upon the foregoing, Plaintiff and the members of the Class are entitled to a presumption of reliance upon the integrity of the market. 23

24 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 24 of 32 PageID: Alternatively, Plaintiff and the members of the Class are entitled to the presumption of reliance established by the Supreme Court in Affiliated Ute Citizens of the State of Utah v. United States, 406 U.S. 128, 92 S. Ct (1972), as Defendants omitted material information in their Class Period statements in violation of a duty to disclose such information, as detailed above. COUNT I Violation of Section 10(b) of The Exchange Act and Rule 10b-5 Against All Defendants 49. Plaintiff repeats and realleges each and every allegation contained above as if fully set forth herein. 50. This Count is asserted against all Defendants and is based upon Section 10(b) of the Exchange Act, 15 U.S.C. 78j(b), and Rule 10b-5 promulgated thereunder by the SEC. 51. During the Class Period, Defendants engaged in a plan, scheme, conspiracy and course of conduct, pursuant to which they knowingly or recklessly engaged in acts, transactions, practices and courses of business which operated as a fraud and deceit upon Plaintiff and the other members of the Class; made various untrue statements of material facts and omitted to state material facts necessary in 24

25 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 25 of 32 PageID: 25 order to make the statements made, in light of the circumstances under which they were made, not misleading; and employed devices, schemes and artifices to defraud in connection with the purchase and sale of securities. Such scheme was intended to, and, throughout the Class Period, did: (i) deceive the investing public, including Plaintiff and other Class members, as alleged herein; (ii) artificially inflate and maintain the market price of Regado securities; and (iii) cause Plaintiff and other members of the Class to purchase or otherwise acquire Regado securities and options at artificially inflated prices. In furtherance of this unlawful scheme, plan and course of conduct, Defendants, and each of them, took the actions set forth herein. 52. Pursuant to the above plan, scheme, conspiracy and course of conduct, each of the Defendants participated directly or indirectly in the preparation and/or issuance of the quarterly and annual reports, SEC filings, press releases and other statements and documents described above, including statements made to securities analysts and the media that were designed to influence the market for Regado securities. Such reports, filings, releases and statements were materially false and misleading in that they failed to disclose material adverse information and misrepresented the truth about the REG1 clinical trial, and Regado s finances and business prospects. 25

26 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 26 of 32 PageID: By virtue of their positions at Regado, the Individual Defendants had actual knowledge of the materially false and misleading statements and material omissions alleged herein and intended thereby to deceive Plaintiff and the other members of the Class, or, in the alternative, Defendants acted with reckless disregard for the truth in that they failed or refused to ascertain and disclose such facts as would reveal the materially false and misleading nature of the statements made, although such facts were readily available to Defendants. Said acts and omissions of Defendants were committed willfully or with reckless disregard for the truth. In addition, each defendant knew or recklessly disregarded that material facts were being misrepresented or omitted as described above. 54. Information showing that Defendants acted knowingly or with reckless disregard for the truth is peculiarly within Defendants knowledge and control. As the senior managers and/or directors of Regado, the Individual Defendants had knowledge of the details of Regado s internal affairs. 55. The Individual Defendants are liable both directly and indirectly for the wrongs complained of herein. Because of their positions of control and authority, the Individual Defendants were able to and did, directly or indirectly, control the content of the statements of Regado. As officers and/or directors of a publicly-held company, the Individual Defendants had a duty to disseminate timely, accurate, and truthful information with respect to Regado s businesses, 26

27 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 27 of 32 PageID: 27 operations, future financial condition and future prospects. As a result of the dissemination of the aforementioned false and misleading reports, releases and public statements, the market price of Regado securities was artificially inflated throughout the Class Period. In ignorance of the adverse facts concerning Regado s business and financial condition which were concealed by Defendants, Plaintiff and the other members of the Class purchased or otherwise acquired Regado securities at artificially inflated prices and relied upon the price of the securities, the integrity of the market for the securities and/or upon statements disseminated by Defendants, and were damaged thereby. 56. During the Class Period, Regado securities were traded on an active and efficient market. Plaintiff and the other members of the Class, relying on the materially false and misleading statements described herein, which the Defendants made, issued or caused to be disseminated, or relying upon the integrity of the market, purchased or otherwise acquired shares of Regado securities at prices artificially inflated by Defendants wrongful conduct. Had Plaintiff and the other members of the Class known the truth, they would not have purchased or otherwise acquired said securities, or would not have purchased or otherwise acquired them at the inflated prices that were paid. At the time of the purchases and/or acquisitions by Plaintiff and the Class, the true value of Regado securities was substantially lower than the prices paid by Plaintiff and the other members of the 27

28 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 28 of 32 PageID: 28 Class. The market price of Regado securities declined sharply upon public disclosure of the facts alleged herein to the injury of Plaintiff and Class members. 57. By reason of the conduct alleged herein, Defendants knowingly or recklessly, directly or indirectly, have violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. 58. As a direct and proximate result of Defendants wrongful conduct, Plaintiff and the other members of the Class suffered damages in connection with their respective purchases, acquisitions and sales of the Company s securities during the Class Period, upon the disclosure that the Company had been disseminating misrepresented financial statements to the investing public. COUNT II Violation of Section 20(a) of The Exchange Act Against The Individual Defendants 59. Plaintiff repeats and realleges each and every allegation contained in the foregoing paragraphs as if fully set forth herein. 60. During the Class Period, the Individual Defendants participated in the operation and management of Regado, and conducted and participated, directly and indirectly, in the conduct of Regado s business affairs. Because of their senior positions, they knew the adverse non-public information about Regado s misstatement of income and expenses and false financial statements. 28

29 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 29 of 32 PageID: As officers and/or directors of a publicly owned company, the Individual Defendants had a duty to disseminate accurate and truthful information with respect to Regado s financial condition and results of operations, and to correct promptly any public statements issued by Regado which had become materially false or misleading. 62. Because of their positions of control and authority as senior officers, the Individual Defendants were able to, and did, control the contents of the various reports, press releases and public filings which Regado disseminated in the marketplace during the Class Period concerning Regado s results of operations. Throughout the Class Period, the Individual Defendants exercised their power and authority to cause Regado to engage in the wrongful acts complained of herein. The Individual Defendants therefore, were controlling persons of Regado within the meaning of Section 20(a) of the Exchange Act. In this capacity, they participated in the unlawful conduct alleged which artificially inflated the market price of Regado securities. 63. Each of the Individual Defendants, therefore, acted as a controlling person of Regado. By reason of their senior management positions and/or being directors of Regado, each of the Individual Defendants had the power to direct the actions of, and exercised the same to cause, Regado to engage in the unlawful acts and conduct complained of herein. Each of the Individual Defendants exercised 29

30 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 30 of 32 PageID: 30 control over the general operations of Regado and possessed the power to control the specific activities which comprise the primary violations about which Plaintiff and the other members of the Class complain. 64. By reason of the above conduct, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act for the violations committed by Regado. PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment against Defendants as follows: A. Determining that the instant action may be maintained as a class action under Rule 23 of the Federal Rules of Civil Procedure, and certifying Plaintiff as the Class representative; B. Requiring Defendants to pay damages sustained by Plaintiff and the Class by reason of the acts and transactions alleged herein; C. Awarding Plaintiff and the other members of the Class prejudgment and post-judgment interest, as well as their reasonable attorneys fees, expert fees and other costs; and D. Awarding such other and further relief as this Court may deem just and proper. DEMAND FOR TRIAL BY JURY Plaintiff hereby demands a trial by jury. 30

31 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 31 of 32 PageID: 31 Dated: July 10, 2014 LITE DEPALMA GREENBERG, LLC /s/ Bruce D. Greenberg Bruce D. Greenberg Jeffrey A. Shooman Two Gateway Center, Suite 1201 Newark, NJ Telephone: (973) Facsimile: (973) 0858 bgreenberg@litedepalma.com jshooman@litedepalma.com POMERANTZ LLP Jeremy A. Lieberman Francis P. McConville 600 Third Avenue, 20th Floor New York, New York Telephone: (212) Facsimile: (212) jalieberman@pomlaw.com fmcconville@pomlaw.com POMERANTZ LLP Patrick V. Dahlstrom 10 South La Salle Street, Suite 3505 Chicago, Illinois Telephone: (312) Facsimile: (312) pdahlstrom@pomlaw.com Attorneys for Plaintiff 31

32 Case 3:14-cv JAP-DEA Document 1 Filed 07/10/14 Page 32 of 32 PageID: 32 CERTIFICATION PURSUANT TO LOCAL CIVIL RULE 11.2 Plaintiff, by his attorneys, hereby certifies that to the best of his knowledge, the matter in controversy is not related to any other action. Plaintiff is not currently aware of any other party who should be joined in this action. I hereby certify that the foregoing statements made by me are true. I am aware that if any of the foregoing statements made by me are willfully false, I am subject to punishment. Dated: July 10, 2014 LITE DEPALMA GREENBERG, LLC /s/ Bruce D. Greenberg Bruce D. Greenberg Two Gateway Center, Suite 1201 Newark, NJ Telephone: (973) Facsimile: (973) 0858 bgreenberg@litedepalma.com 32