A law firm is gathering support for a class action lawsuit against Edap TMS (NSDQ:EDAP), accusing leadership of misleading investors after an FDA expert panel panned the company’s flagship ablation technology.EDAP shares have lost more than 65% over the last month after the FDA’s Gastroenterology & Urology Devices panel voted against recommending approval for the Ablatherm ultrasound ablation system for treatment of prostate cancer. The panel voted unanimously that the device did not appear to be effective and in majority that the technology was not safe.
The panel chided EDAP for its study structure and noted a high rate of adverse events associated with Ablatherm treatment, including erectile dysfunction and urinary incontinence, clinically significant rates of stricture, urethral injury and bowel injury.
The law firm of Faruqi & Faruqi, LLP, is looking for lead plaintiff to represent claims against the company, saying that Edap’s leadership exaggerated Ablatherm’s safety and efficacy and understated adverse events.
“As a result, the Company’s statements were materially false and misleading at all relevant times,” the law firm said in a prepared statement.
Faruqi & Faruqi has filed a class action claim in the U.S. District Court of the Southern District of New York and is looking for shareholders with losses greater than $100,000 to lead the lawsuit.
Edap issued its own statement earlier this month reacting to the FDA panel vote, noting “disappointment and frustration that the panel has been unable to provide concrete guidance on a potential, acceptable approval path for a new device to treat prostate cancer.”
The technology already has approval and reimbursement from the French Ministry of Health and has been used in more than 40,000 prostate cancer patients worldwide over the course of 15 years, according to an Edap statement.
“We believe there is strong clinical evidence supporting the safety of our Ablatherm Integrated Imaging [high intensity focused ultrasound (HIFU)] device,” CEO Marc Oczachowski said in prepared remarks. “To date, there have been no restrictions placed on the use of Ablatherm-HIFU from any of the numerous regulatory authorities under which it has been approved. If Ablatherm HIFU was dangerous or unsafe, it would not have survived more than 5 years in any market and would not be used by any urologist or would be forbidden by regulatory authorities around the world, this is not the case.”
“Based on the panel comments, we could interpret that applying today’s standards to all available treatment options would result in no therapeutic options for low-risk prostate cancer patients in the U.S.,” Oczachowski added. “Finally, we strongly believe that there are probably more risks in excluding a technology that has 15 year proven experience from the American patient choice than having it available in a controlled and monitored environment in the country, as it could result in an increasing HIFU medical tourism with the known risks associated.”
Ablatherm is a computer-controlled HIFU medical device that delivers treatment from an endorectal probe under ultrasound visualization and is intended to ablate the entire prostate gland. Prostate cancer is the 2nd-most-common cause of cancer-related death in U.S. men and is now the leading cause of soft tissue malignancy in men, accounting for 3% of all male deaths.
There are currently no legally marketed HIFU devices to treat prostate cancer and men with localized prostate cancer are treated either aggressively with radical prostatectomy surgery or radiation or more conservatively with regular monitoring and delayed therapy when warranted. Cryotherapy and hormone therapy are also used on occasion to battle prostate cancer.
