Delcath Systems, Inc. (NASDAQ:DCTH) Under Investigation, Down 43.86%
Northern, WI 05/03/2013 (GDPInsider) – Delcath Systems, Inc. (NASDAQ:DCTH) is taking a hit today after opening at 0.38. The stock closed previously at 0.79 but has had a rocky start to the day’s trading with a range of 0.38 and 0.43.
Investors awoke to the news that DCTH is being investigated for possible breach of federal securities laws. The investigation is being carried out by Bronstein, Gewirtz & Grossman, LLC on behalf of purchasers who bought stock in DCTH. The bad news started yesterday (May 2, 2013) when it came to light that DCTH lost in its bid to have its Melblez kit therapy for treatment of hepatic-dominant metastatic ocular melanoma approved by the FDA. The FDA advisory committee voting on the approval of the drug rejected it by a margin 16-0.
In voting against the approval of the drug treatment kit, the FDA cited “substantial and severe toxicity” which emanated during the clinical trials. According to the review statement, 7% of the 122 patients who took part in the clinical study died from treatment side effects. The drug-device combination in the end failed proved itself to the FDA.
Ultimately DCTH stands accused of not disclosing the risks and material issues associated with the phase III trial to all investors and this is the anchor for the investigation. The steep drop in price means that DCTH is trading 44.25% below its 52-week low of 0.75 and 85.38% below its 52-week high of 2.86. The stock has a RSI of 17.13 and analysts have set a target price of 3.63 for DCTH. The stock is down 73.83% on its 50-day simple moving average and also down 70.18% on its 20-day simple moving average.
The FDA hasn’t closed the door completely on the approval of the Melbez treatment kit and has told DCTH that it would review the drug-device combination after a new set of clinical trials is conducted.
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