US Class Action Lawsuit for Israeli Drugmaker Pharmos

According to Israeli news sources, a class action lawsuit has been filed in New Jersey, US, against research-based drugmaker Pharmos. The case relates to the alleged failure of the Israeli company's traumatic brain injury drug dexanabinol in Phase II clinical trials, and claims that Pharmos misled investors for the purposes of financial gain.

The petitioners also claim that a senior executive sold shares two weeks before the alleged failure of the drug became apparent. However, Pharmos CEO Haim Aviv has countered that he personally lost some US$3mn as a result of a fall in the share price. Further, company statements indicate that, far from acknowledging any negative study results, it is to proceed with Phase III clinical trials on the potentially lucrative drug.