A woman who bought shares in biotech startup OvaScience, which is investigating a way to treat infertility in older women, charges the company withheld the information the FDA was going to make it hard for the company to conduct human trials on its method, causing her and other investors to lose lots of money when the news finally came out.
Miriam Ratner is seeking to become lead plaintiff against the company, in a class-action lawsuit filed last week in US District Court in Cambridge.
OvaScience's research is based on work by Jonathan Tilly, at the time a researcher at Harvard Medical School and Massachusetts General Hospital (now biology chairman at Northeastern), who discovered female mammals produce "egg precursor cells," which are able to turn into new eggs, and on the theory that the reason the rate of success of treatments such as IVF in women over 40 is because the mitochondria in their eggs have become too weak to generate the energy the cells need to turn into embryos when fertilized.
The company is looking to extract the more vital mitrochondria from these precursor cells, implant them in an egg extracted from a patient, fertilize the egg with sperm, then implant the fertilized cell in her uterus.
In her lawsuit, Ratner says the company was seeking to save money by declaring the process was not subject to the normal extensive FDA approval process for human testing because "it involves only 'minimal manipulation,' i.e., processing that does not alter the relevant biological characteristics of the cellular material."
The FDA, she charges, didn't buy that removing part of one cell and implanting it in another involved "minimal manipulation," but OvaScience sat on the news for nine months last year, during which she and other investors bought stock at "inflated" prices, only to watch their stock values drop 23% the day after the company announced it was suspending signups for the clinical trials due to the FDA deciding it needed a much more detailed explanation from the company first.
Ratner is seeking the money she alleges she and other investors lost by buying OvaScience stock during those nine months, plus penalties and lawyers' fees.