MADISON, Wis., June 28, 2011 /PRNewswire/ — Novelos
Therapeutics, Inc. (OTCBB: NVLT), a pharmaceutical company
developing novel drugs for treatment and diagnosis of cancer, today
announced that on June 23, 2011, Judge Nathaniel M. Gorton allowed
the defendants’ motion to dismiss the putative federal securities
fraud class action brought in the United States District Court for
the District of Massachusetts in March 2010 entitled Boris Urman
and Ramona McDonald v. Novelos Therapeutics, Inc. and Harry S.
Palmin (Civil Action No. 10-10394-NMG). The plaintiffs
alleged that the defendants made materially false and misleading
statements and omissions regarding the progress of the Phase 3
clinical trial before the United States Food and Drug
Administration of Novelos’ oxidized glutathione compound, NOV-002,
in application to non-small cell lung cancer. On February 24,
2010, Novelos announced that the Phase 3 trial had concluded
unsuccessfully, and the price per share of Novelos’ common stock
dropped by approximately 80% from its close on the prior day.
In dismissing the action without prejudice, Judge Gorton
concluded that the statements made by Mr. Palmin to which the
plaintiffs objected were not misleading, and endorsed the
“competing and more persuasive non-fraudulent inference that Mr.
Palmin understood that alleged changes to the NOV-002
specifications presented to the FDA affected only the color
specifications rather than the effectiveness or fundamental
composition of the drug.”
Novelos and Mr. Palmin were defended by Foley Hoag LLP.
About Novelos Therapeutics, Inc.We are a pharmaceutical
company developing novel drugs for the treatment and diagnosis of
cancer. We currently have three cancer-targeted compounds, which
are selectively taken up and retained in cancer cells (including
cancer stem cells) versus normal cells. Thus, our therapeutic
compounds directly kill cancer cells while minimizing harm to