Shareholders sue Maxim for generating misleading press coverage

SAN DIEGO: At least six class action suits have been filed against Maxim Pharmaceuticals by its shareholders. The suits accuse Maxim of issuing misleading press releases and conducting deceptive media interviews about Maxamine, a drug the company developed to treat metastatic melanoma.

SAN DIEGO: At least six class action suits have been filed against Maxim Pharmaceuticals by its shareholders. The suits accuse Maxim of issuing misleading press releases and conducting deceptive media interviews about Maxamine, a drug the company developed to treat metastatic melanoma.

SAN DIEGO: At least six class action suits have been filed against Maxim Pharmaceuticals by its shareholders. The suits accuse Maxim of issuing misleading press releases and conducting deceptive media interviews about Maxamine, a drug the company developed to treat metastatic melanoma.

Maxamine had been in clinical trials and was awaiting FDA approval for a 2001 launch. FDA refused to approve the drug on December 12, 2000.

'The company made public statements and issued press releases about the trials' results and prospects for FDA approval,' said Michael Lange, a partner in Berman, DeValerio & Pease, one of the law firms filing suit.

'Actually, they knew they had failed.' Lange based his claim on FDA regulations that require a company's clinical results to match a predicted outcome.

Following the announcement, Maxim's stock, which had peaked at dollars 79.50 on March 1, 2000, fell to as low as dollars 9.25.

One of the shareholder complaints cited press releases, as well as stories in Bioworld Today and Marketletter. '(Those) who invested based on Maxim's representations about its compliance with FDA regulations and the effectiveness of its drug ... have suffered millions in damages,' the complaint stated.

Lange said the public is at the mercy of companies when following a drug's approval. 'Shareholders have no way of verifying data,' he said. 'That's why it's so important that the companies are accurate in their representation.'

Maxim did not respond to PRWeek's calls, nor did its PR firm, New York-based Burns McClellan.





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