Federman & Sherwood Announces the Filing of a Securities Class Action Lawsuit against Aradigm Corporation

Oklahoma City, OK (January 14, 2018) – On January 11, 2018, a securities class action lawsuit was filed in the United States District Court for the Northern District of California against Aradigm Corporation (NASDAQ: ARDM). The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material or false misrepresentations to the market which had the effect of artificially inflating the market price during the Class Period, which is July 27, 2017 through January 8, 2018. More specifically, the Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the methodology underlying Aradigm’s Linhaliq Phase III clinical trials was not well tailored to yield consistent efficacy findings or to provide data sufficient to account for discordant efficacy findings; (ii) the endpoint of the Phase III trials—namely, delaying the time to first exacerbation on study therapy compared to placebo over approximately one year of observation—was unlikely to demonstrate a clinically meaningful benefit with respect to a patient population that would likely be taking the drug for a longer duration; (iii) accordingly, these studies were unlikely to support FDA approval of the Linhaliq NDA; and (iv) as a result, Aradigm’s public statements were materially false and misleading at all relevant times.

On July 27, 2017, Aradigm submitted a New Drug Application (“NDA”) to the U.S. Food and Drug Administration (“FDA”) for U.S. marketing approval for Linhaliq for the treatment of non-cystic fibrosis bronchiectasis patients with chronic lung infections. Then on January 9, 2018, the FDA announced that it would discuss Aradigm’s Linhaliq NDA at the Antimicrobial Drugs Advisory Committee meeting scheduled for January 11, 2018. The FDA stated that “[r]easons for the discordance in efficacy findings between trials cannot be explained based on the information collected in the two trials” underlying the Linhaliq NDA and that, with respect to the clinical trials’ endpoint, “it is unclear that delaying the time to first exacerbation on study therapy compared to placebo over approximately one year of observation translates into a clinically meaningful benefit for a patient population that would most likely be on this therapy for long durations.”

On this news, Aradigm’s share price fell $2.28, or 38.12%, to close at $3.70 per share on January 9, 2018.

Plaintiff seeks to recover damages on behalf of all Aradigm Corporation shareholders who purchased common stock during the Class Period and are therefore ea member of the Class as described above. You may move the Court no later than Monday, March 12, 2018 to serve as a lead plaintiff for the entire Class. However, in order to do so, you must meet certain legal requirements pursuant to the Private Securities Litigation Reform Act of 1995.

To join this class action, click here to obtain an investor certification. Once complete, please email this form to rkh@federmanlaw.com, fax to us at (405) 239-2112 or send by regular mail to Federman & Sherwood, 10205 North Pennsylvania Avenue, Oklahoma City, OK 73120, ATTN: Robin.