Sesen Bio (SESN -2.00%) had a tumultuous Friday. On a generally fine day for stocks, the company's shares fell by almost 10%. A clutch of law firms are coming for it, and investors are stepping away.
On Friday, several fresh lawsuits against Sesen Bio were announced. As they were, other law firms took the opportunity to remind shareholders of their existing suits.
These center on the biotech company's lead pipeline drug, cancer treatment Vicineum. In one of the cases, brought by the Schall Law Firm, Sesen Bio is accused of "making false and misleading statements to the market."
According to Schall, these statements glossed over the fact that "Vicineum suffered from more than 2,000 violations of trial protocols including 215 'major' violations." The law firm also claims that company clinical investigators were found guilty of noncompliance, and that Vicineum was shown to leak into the body, causing harmful side effects.
Not coincidentally, the lawsuits are piling in shortly after Sesen Bio had its Biologics License Application (BLA) for Vicineum to treat a form of bladder cancer rejected by the Food and Drug Administration. The regulator did leave the door open somewhat, offering a set of recommendations aimed at bolstering Vicineum's chances with a revised BLA.
Major business setbacks, and resulting share-price dives like in this case, often generate opportunistic lawsuits backed by aggrieved stockholders. Sesen Bio hasn't specifically addressed the accusations it faces; it's hopefully more busy strategizing about the next FDA submission. If I were a shareholder, I'd be more concerned with that than the unsurprising legal blowback.