Earlier this week a class action complaint was filed against the defendants Pulse Biosciences, Inc.by the plaintiff Viron Bryan Ngosiok in the Northern District of California.
Pulse Biosciences, Inc is a “bioelectric medicine company,” which only produces CellFX System as its only commercialized product.
The complaint alleges that the Pulse Biosciences, Inc had “made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects.”
The plaintiff argues that the company had conducted a “investigational device exemption study to evaluate the treatment of sebaceous hyperplasia lesions using CellFX System.” The initial aim of the study was to showcase the device’s effectiveness to treat sebaceous hyperplasia lesions through a 510(K) submission to the Food and Drug Administration (FDA).
The FDA then announced that CellFX System showed insufficient evidence to treat sebaceous hyperplasia lesions and “that the company had not met the primary endpoints of the sebaceous hyperplasia FDA-approved IDE study.” Due to these revelations from the FDA the price of the Pulse Bioscience went tumbling down 34% from its initial opening price on February 8th, 2022.
Some of the claims being made by the defendants prior to the FDA announcement were “Results from our research have demonstrated that NPS has a unique ability to clear cellular structures located within the dermis of the skin, such as enlarged sebaceous glands.” Based on these claims, investors communicated with the defendants on the assumption that the price of the Pulse Biosciences would see a rise in its stock price.
Ultimately, the defendants are facing two claims for relief, a claim for violation of section 10(b) of the Exchange Act and the related Rule 10b-5 and a claim for violation of section 20(a) of The Exchange Act.
The plaintiff is represented by Glancy Prongay & Murray LLP.
