b'test, including claiming that the test was 100% accurateis Ocaliva for use in treatment of PBC, which was grant-in determining current or past exposure to COVID-19.ed accelerated approval by FDA in 2016. Ocaliva is It also claimed that the test has a high sensitivity ratealso being developed for the treatment of other indica-(i.e., the ability of the test to correctly identify those withtions, such as nonalcoholic steatohepatitis (NASH). In the virus) and specificity rate (i.e., the ability to correct- September 2019, Intercept submitted an NDA to FDA ly identify those without the virus). On May 11, 2020,for Ocaliva seeking approval to treat patients with liver after Chembio received Emergency Use Authorizationfibrosis due to NASH. Between September 2019 and (EUA) for the antibody test, Chembio announced theMay 2020, Intercept and its officers made a series of closing of a public offering of 2.6 million shares at $11.75public statements concerning: (1) Ocalivas prospects for per share. The next month, on June 16, 2020, FDAthe treatment of NASH, (2) the anticipated accelerated issued a press release announcing that it had revokedtimeline and likelihood of FDAs approval of its NDA for Chembios EUA, citing data showing a higher than ex- NASH, (3) Ocalivas net sales, and (4) Ocaliva-related pected rate of false results and higher than that reflect- deaths reported in PBC patients. On May 22, 2020, ed in the authorized labeling for the device. The nextIntercept disclosed that FDA had postponed an advi-day, Chembio filed a Form 8-K disclosing FDAs revoca- sory committee meeting related to Intercepts NDA in tion of the tests EUA. Chembios stock price thereafterorder to review additional data. Intercepts stock price dropped by approximately 60%.dropped more than 12%. On June 29, 2020, Intercept In June and July of 2020, investors filed three putativeissued a press release announcing that FDA had issued class action complaints against Chembio, its CEO, anda CRL rejecting Ocalivas NDA. The CRL explained that the executive chair of its board of directors, seeking tobased on the data the FDA has reviewed to date, it represent a class of purchasers of the companys stockwas determined that the predicted benefit of [the drug] at various points between March 2020 and June 2020 remains uncertain and does not sufficiently outweigh Plaintiffs allege violations of Section 10(b) and 20(a) ofthe potential risks to support accelerated approval the 1934 Act and Rule 10b-5 promulgated thereunder,for the treatment of patients with liver fibrosis due to and claim that various statements issued by defendantsNASH. On this news, Intercepts stock price fell almost concerning the effectiveness of the DPP COVID-19 test40%. On October 8, 2020, it was reported that Intercept were materially false and/or misleading because de- was facing an investigation from [FDA] over the potential fendants misrepresented and failed to disclose that therisk of liver injury in patients taking Ocaliva. Intercepts test did not provide high-quality results and that therestock price fell another 8%. were material concerns with the tests performanceOn November 5, 2020, investors filed a putative class and accuracy. Plaintiffs also allege that defendants hadaction complaint, originally in the Eastern District of the motive and opportunity to perpetuate a fraudulentNew York, against Intercept and certain of its officers, scheme by virtue of Chembios May 11, 2020 publicasserting claims under Sections 10(b) and 20(a) and offering.Rule 10b-5 of the 1934 Act. The complaint alleges that: On August 17, 2020, each of the plaintiffs moved to con- (1) defendants downplayed the true scope and severity solidate the related cases and moved for appointmentof safety concerns associated with Ocaliva; (2) these of a lead plaintiff. On December 29, 2020, the courtrisks increased the likelihood of an FDA investiga-consolidated the related cases and appointed Chembiotion into Ocalivas development, in turn jeopardizing investors as co-lead plaintiffs. Lead plaintiffs are ex- Ocalivas marketability and the sustainability of its sales; pected to file an amended complaint in February 2021. (3) any benefits associated with Ocaliva in treating NASH were outweighed by the risks of its use; and (4) as a result, FDA was unlikely to approve Ocalivas NDA. Chauhan v. Intercept Pharmaceuticals, Inc.On December 29, 2020, the parties filed a joint motion et al., Case No. 1:21-cv-36 (LJL) (S.D.N.Y.)to change venue to the Southern District of New York. FDA Approval Prospects The court granted the motion on January 1, 2021, and the case was transferred to the Southern District of As noted above, Intercept is a biopharmaceutical com- New York. On January 25, 2021, the court appointed a pany that focuses on the development and commercial- lead plaintiff. Lead plaintiff is expected to file an amend-ization of therapeutics to treat progressive non-viral liv- ed complaint by March 11, 2021.er diseases. As discussed in the summary above of the Liu v. Intercept case, Intercepts lead product candidate 39'