Roy Sapir, et al. v. Nymox Pharmaceutical Corporation, et al. 14-CV …securities.stanford.edu/.../201569_r01c_14CV07331.pdf · 2016-04-05 · Case 2:14-cv-07331-JLL-JAD Document

Case 2:14-cv-07331-JLL-JAD Document 25 Filed 06/09/15 Page 1 of 65 PageID: 388

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

ROY SAPIR, on behalf of himself and all others similarly situated,

Plaintiff,

v.

PAUL AVERBACK and NYMOX PHARMACEUTICAL CORPORATION,

Civil Action No. 2:14-cv-07331-JLL-JAD

CLASS ACTION

AMENDED COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS

RY TRIAL DEMANDED Defendants.

ECF CASE

This is a securities class action on behalf of all persons who purchased or acquired the

common stock of Nymox Pharmaceutical Corporation (“NYMOX” or the “Company”) between

January 31, 2011 and November 2, 2014, inclusive (the “Class Period”). The claims asserted

arise under §§10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and

Rule 10b-5 promulgated thereunder and are made upon investigation by plaintiffs’ counsel

including consultation with experts in the fields of urology, new drug applications and Phase 3

clinical trials pursuant to the rules and regulations of the Food and Drug Administration (“the

FDA”) and conversations with former employees of NYMOX. Harry Lattanzio, PRS, Inc.,

Network Accreditation Services, Inc., Andrew Silverman, and Rock 49 th Restaurant Group were

appointed Lead Plaintiffs (“Lead Plaintiffs”) by Order dated February 26, 2015.

SUMMARY OF THE ACTION

1. NYMOX has no drugs on the market. Since 2009, defendants have been engaged

in an effort to obtain approval from the FDA for NX-1207, a drug for the treatment of benign

prostatic hyperplasia (BPH), a condition found in older men whose prostates have become


enlarged, restricting the flow of urine from the bladder. There are competing drugs for treatment

of BPH already approved by the FDA and on the market. However, defendants, prior to and

throughout the Class Period, touted NX-1207 as a vastly superior treatment for BPH, primarily

because, defendants claimed, NX-1207 had none of the adverse side effects associated with use

of the competing drugs already on the market and the relative ease of use, one simple injection in

a doctor’s office, rather than repeated doses required by the competing drugs in the market.

2. Prior to the Class Period, defendants designed two large-scale Phase 3 studies of

NX-1207, each to include 500 men. For each trial, each man had to participate in the study for a

period of one year and receive either a single injection of NX-1207 or a single injection of a

placebo. Because the trial was double-blinded, the participant would not know whether he

would receive the drug or the placebo. During the one-year period of participation, the

participant could not receive any other treatment for his BPH.

3. The first Phase 3 Study, titled “Phase III Multicenter Prospective Randomized

Parallel-Group Placebo-Controlled Double Blind Clinical Evaluation of NX-1207 for the

Treatment of BPH NX02-0017,” known as “the NX02-0017 Study” (ClinicalTrials.gov identifier

NCT00918983), had a study start date of April 2009. The study had two arms, Experimental:

NX-1207 with a single intraprostatic injection of 2.5 mg. of NX-1207 and a Placebo Comparator

with a single intraprostatic injection of placebo. The final data collection date was November

2013 and the study was completed in November 2013.

4. The second Phase 3 study, titled “Phase III Multicenter Prospective Randomized

Parallel-Group Placebo-Controlled Double Blind Clinical Evaluation of NX-1207 for the

Treatment of BPH NX02-0018,” known as “the NX02-0018 Study” (ClinicalTrials.gov identifier

NCT00945490), had a study start date of May 2009. The NX02-0018 Study also had two arms,

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Experimental: NX-1207 with a single intraprostatic injection of 2.5 mg. of NX1207 and a

Placebo Comparator with a single intraprostatic injection of placebo. The final data collection

date was May 2014 and the study was completed in May 2014.

5. Throughout the Class Period, defendants engaged in a fraudulent and misleading

course of conduct intending to, and which did mislead the market concerning the design and

conduct of the two Phase 3 Studies. Defendants’ scheme and continuing course of conduct was

characterized by a series of false and misleading public statements concerning the NX02-0017

Study and the NX02-0018 Study, as alleged below, which misled the market to expect and

believe that the two Phase 3 studies would produce statistically significant results for NX-1207.

However, defendants knowingly misrepresented the impact of the design of both the NX02-0017

Study and the NX02-0018 Study on the drug’s ability to achieve statistically significant results

because, contrary to defendants’ public statements concerning the design and conduct of the

trials, defendants knew that the placebo effect would be significantly enhanced because of the

design. As those fatal flaws began and continued to adversely affect the conduct of the two

studies and the efficacy of the drug was called into question, defendants, contrary to generally

accepted industry standards, continued to engage in their misleading conduct in an effort to stall

disclosure of the disastrous efficacy results in hopes that the data from the two Phase 3 Studies

could be manipulated in a way to make it appear that the efficacy of the drug had been achieved

by combining the results of the two Phase 3 Studies, contrary to the design of the two Phase 3

Studies. When the results of the first phase 3 trial, NX-1207, were in, defendants, contrary to

their earlier statements and contrary to generally accepted industry practice, did not timely

disclose the negative Top-Line results showing that the drug had failed. Instead, defendants

stalled disclosing the Top-line results for one year while they waited for the Top-line results of

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the second Phase 3 trial to be available in the hope that, contrary to generally accepted industry

practice, the combined results would show statistical significance. Defendants’ conduct was

characterized by a total lack of transparency and in direct contrast to generally accepted industry

practice and standards. There is no credible justification for defendants to have withheld from

the market the timely disclosure of the material facts that the drug had failed in each of the two

Phase 3 trials.

6. Although defendants had available to them both the Top-line results and the “full

results” form the NX02-0017 Study as early as November 2013 showing that the drug had failed

to achieve statistical significance in the NX02-0017 Study, defendants, contrary to generally

accepted industry practice, made no disclosure of these material facts until 12 months later in the

November 2, 2014 News Release and the November 3, 2014 conference call. And although

defendants had available to them the Top-line results and the “full results” from the NX02-0018

Study as early as May 2014 showing that the drug had failed to achieve statistical significance in

the NX02-0018 Study defendants, again contrary to generally accepted industry practice, waited

until November 2, 2014 and November 3, 2014 to disclose this adverse material fact and the

adverse Top-line results.

7. There is no credible explanation that comports with generally accepted industry

standards and practice for defendants’ delay in reporting the Top-line results of the NX02-0017

Study until November 2014 when those results were fully available to defendants in November

2013 when the trial was completed. It is standard practice in the industry to unblind and review

the results of a Phase 3 study as soon as the study is completed. And, in fact, as defendants

stated in the NYMOX News Release dates November 28, 2012, they had every intention of

unblinding and reporting the Top-line results of the NX02-0017 Study by “late 2013.” This is

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particularly true when a second Phase 3 trial is ongoing and there is the ethical issue of

continuing to enroll patients in that trial when the drug has proven to be a failure in the first

Phase 3 trial. It must have been only when they unblinded the results in November 2013 and

saw that the drug had failed to achieve statistical significance that they decided, without any

statement to the market in explanation, to withhold the adverse material facts until they could

finish the NX02-0018 Study in the groundless hope that perhaps the results of that Study when

combined with the results of the NX02-0017 Study would offset the disastrous results of the

NX02-0017 Study and the drug show statistical significance. Even that hope was finally

abandoned by defendants when the NX02-0018 Study was completed in May 2014 and

defendants would have unblinded the results at that time. Those Top-line results showed that the

drug had failed to show statistical significance in that Phase 3 study as well and that even if the

results of the two Phase 3 Studies were combined, the drug was still a failure. Again, however,

despite their public statement in May 2013, as alleged below, that they would report the Top-line

results from the NX02-0018 Study in “early 2014,” defendants, with no credible explanation and

in direct contrast to generally accepted industry standards and practice, waited until November 2,

2014 to disclose the material fact of the failure of the NX02-0018 Study and until November 3,

2014 to disclose the Top-line results.

8. On Sunday, November 2, 2014, defendants issued an extremely short News

Release disclosing the failure of the two studies and setting a conference call for Monday

November 3, 2014, after the close of the market. Even in the November 2 News Release,

however, defendants continued to misrepresent, stating that they would report the “[f]ull results”

of the two studies “at a later date.” To date, more than seven months later, defendants still have

not reported the full results to the public, instead laying off numerous employees, down-sizing

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operations, moving the Company’s head office and domicile from Quebec to the Bahamas, and

having directors resign.

9. On the November 3, 2014 conference call, defendants, through defendant Paul

Averback, disclosed the following material facts which were known to defendants from the

outset of, and throughout the Class Period, but which defendants knowingly failed to disclose or

misrepresented in the public statements they made during the Class Period:

a. That by November 2013, defendants knew or recklessly disregarded the material fact that the drug had failed to show statistical significance in the first Phase 3 trial;

b. the design of the NX02-0017 Study and the NX02-0018 Study would lead to the exclusion of those BPH patients with more serious conditions thereby increasing the likelihood that the difference in effect between placebo and drug would be minimized and would cause significant if not overwhelming difficulties in patient enrollment and continued patient participation for the required year-long period causing substantial delays in the completion of the studies. Defendant Averback stated that the randomization was asymmetric, 3:2, with three patients getting the drug and two patients getting the placebo, an injection of saline. Averback admitted that with that design, the “skewing effect is potentially, definitely a factor . . . the inescapable fact is that if you need to enroll 1000 people in the U.S. and you’re going to tell them that they will be receiving an injection of saline and they are going to be followed for a year, it’s an amazingly high mountain to climb to get people in the study because you know 40% of them are going to get saline injections so as a patient with a big BPH problem and you’re looking at the fact that you have a good chance of getting a placebo shot of saline it’s not a heck of an impetous to get into the study and it’s very difficult . . . enrollment is the great limiting step . . . the terrible mountain to climb of getting 1000 plus men willing to take the placebo injection. And remember of course to get 1000 men we had to screen a few thousand so there is a lot more than meets the eye there” (unofficial tr at pp 3, 11);

c. the design of the NX02-0017 Study and the NX02-0018 Study would cause significant difficulties in accurately measuring the difference in effect of the drug and the placebo on the patients due to the highly subjective questionnaire each participant had to complete which was the end point, that is, the only measure of the drug’s effect on the patient. Defendant Averback stated, “In prostate cancer our end points are labratory, biopsies, PSAs and objective progression to surgery or

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radiation. The real end points are not subject to individuals filling out questionnaires . . . [with questionnaires] there is just some people who they come in and they want to please and they don’t want to say ‘no,’ and they don’t want to say it’s not helping and there are some people who are more curmudgeonly and they want to say nothing works and if your placebos happen to be much more agreeable people [than those getting the drug] and you get some funny thing can happen and when somebody comes in and reports a 25 point improvement after a shot of saline you know that is not a real effect, that’s more of an effect than you would get from surgery, it’s not right.” (tr at pp 6, 13) Averback answered the following analyst’s question with a very succinct, “[t]hat is correct,” to the question, “You kind of talked about it but I just want to reconfirm for my own mind on the placebo effect, the impression I get is that it was based on subjective things from the patients, like saying ‘yeah I definitely feel better,’ as opposed to some quantitative analytical thing where you did surgery or measured volumes or getting hard data as opposed to opinions. Is that right?” (tr pp 19-20) Averback admitted that they knew the problems with the design of the two Phase 3 Studies before they began, stating, “Well you know it’s very hard to be perfectly scientific about this. People, if you ask them questions they will give you accurate answers but not everyone is like that and some people are amenable to suggestibility and to social pressures and to stresses and anxieties that can either turn them to go one way or the other. We’re not trying to make excuses and trying to say that the drug failed because it was unfair or anything like that. Our eyes were wide open. We did a prespecified trial and we knew that this was what one was up against . . . Trying to understand it we will work hard on that. The goal is can we design something that won’t be quite as susceptible to these types of random risks” (tr at p 29);

d. the design of the NX-02-0017 Study and the NX02-0018 Study, both of which relied solely on highly subjective questionnaires to be completed by the participants in the two Phase 3 Studies as the only end point, rendered results from prior studies of NX-1207 inherently unreliable markers or predictors of results in the NX-02-0017 Study and the NX02-0018 Study. As Averback’s statements quoted above readily reveal, the results of each study stand alone and do not presage any subsequent study of similar design because each is subject to the “random risks” presented by different men answering subjective questions; and,

e. the design of the NX-02-0017 Study and the NX02-0018 Study, in which the placebo was an injection of Saline solution directly into the prostate, negated the standard role of a placebo in both Phase 3 Studies and increased the placebo effect in both Phase 3 Studies which presaged the failure of the drug in each of the Phase 3 Studies due to a higher placebo effect. Defendant Averback explained the traditional role of placebo in Phase 3 studies and how that role, by design, was absent in both Phase 3

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Studies. Averback stated, “[i]n drugs it must always be a double blind [meaning that neither the doctor nor the patient knows who gets the drug and who gets the placebo] and it must always be a placebo, at least in the U.S. and that’s a hard fast rule. We tried unsuccessfully at one point to try and make the argument that this was onerous but it’s a prefixed rule . . . You know there’s scientific reasons and there’s logical reasons, but there is no question that when you do an injection of saline it’s not a placebo . . . Whenever someone thinks that they are better or their pain is not being measured these are things outside of the realm of what we call placebo . . . [Saline] is an injectable. Procedures have more of a placebo effect than just a pill. . . ” (tr pp 34, 36, 39).

10. Defendants had strong motive to obfuscate and forestall timely disclosure of the

adverse material facts concerning the two Phase 3 Studies and the adverse results of those two

Phase 3 Studies to the market. Because NYMOX had no significant sales revenues, defendants

funded the operations of NYMOX and the conduct of the two Phase 3 Studies primarily by

selling shares of NYMOX common stock. For example, on December 22, 2011, defendants

announced that NYMOX had secured a commitment of $15 million in equity financing from

institutional investors that was comprised of new common stock. In a News Release dated

December 22, 2011, Defendants stated that the new funding would be used to fund the ongoing

NX02-0017 Study and the NX02-0018 Study. In a series of stock sales between May 23, 2012

and November 28, 2012, NYMOX sold approximately 600,000 additional new shares at prices

ranging between $5.75 and $7.57 per share, raising additional millions of dollars of needed

capital to fund operations and the two Phase 3 Studies.

11. In addition to stock sales and to raise additional monies, NYMOX, in 2010

entered into a contractual arrangement with an Italian company, Recordati, pursuant to which

Recordati would undertake immediate development and commercialization activities of NX-

1207 in the foreign territories covered by the license. In return, Recordati would pay NYMOX

$13 million in revenues deferred over subsequent quarters. The impact of the disclosure of the

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adverse material facts concerning the NX02-0017 Study and the NX02-0018 Study on Recordati

was painfully clear to defendants. Indeed, after defendants’ belated November 2 and 3, 2014

disclosures and because of the drug’s failure in the two Phase 3 Studies, Recordati “prematurely”

interrupted the European clinical trials for NX-1207 and terminated all development and

commercialization efforts for NX-1207. See NYMOX SEC Form 20F for quarter ended March

31, 2015 (“Form 20F”) filed in April 2015 with the SEC.

http://www.sec.gov/Archives/edgar/data/1018735/000117625615000122/0001176256-15-

000122-index.htm.

12. Thus, any drop in the stock price due to disclosure of material adverse facts

concerning the NX02-0117 Study and the NX02-0018 Study would have materially hampered

defendants’ ability to fund ongoing operations including the ongoing conduct of the NX02-0117

Study and the NX02-0018 Study. The disastrous negative impact on NYMOX’s operations from

disclosure of adverse material facts was clear to defendants throughout the Class Period. Indeed,

in the aftermath of the public disclosure of the failure of NX-1207 in the two Phase 3 Studies,

defendants laid off many employees. As the direct result of the layoffs, as defendants stated in

NYMOX’s Form 20F, NYMOX’s auditor KPMG LP determined that NYMOX’s disclosure

controls and procedures were not effective as of December 31, 2014 because of the limited

number of qualified personnel to perform required duties and responsibilities. As a result,

NYMOX concluded, as set forth in the Form 20F that “a reasonable possibility exists that a

material misstatement to the annual consolidated financial statements will not be prevented or

detected on a timely basis.”

13. The failure of NX1207 in the NX02-0017 Study and in the NX02-0018 Study as

reported by defendants on November 2, 2014 came as a complete surprise to the market which

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had been conditioned by defendants throughout the Class Period that the two Studies would be

successful. The market’s reaction was immediate and dramatic as the price of NYMOX

common stock fell 82% to close at $0.93 on unprecedented trading volume of 19.6 million

shares.

VENUE AND JURISDICTION

14. This Court has jurisdiction over the subject matter of this action pursuant to §27

of the Exchange Act, 15 U.S.C. §78aa, and 28 U.S.C. §§1331 and 1367.

15. Venue is proper in this District pursuant to §27 of the Exchange Act, 15 U.S.C.

§78aa, and 28 U.S.C. §1391(b)-(c). NYMOX was incorporated under the Canada Business

Corporations Act in May 1995 to acquire all of the common shares of DMS Pharmaceutical Inc.,

a private corporation which had been carrying on research and development since 1989.

NYMOX has two subsidiaries: one wholly-owned subsidiary named Nymox Corporation and the

other a majority owned subsidiary named Serex, Inc., acquired in 2000. Both subsidiaries are

based in the same building in Hasbrouck Heights, New Jersey. In addition, many of the acts and

transactions giving rise to the violations of law alleged herein, including the preparation and

dissemination to the public of materially false and misleading information, occurred in this

District.

16. In connection with the wrongs complained of herein, defendants, directly or

indirectly, used the means and instrumentalities of interstate commerce, including the United

States mails and interstate telephone communications, and the facilities of the NASDAQ, a

national securities exchange.

PARTIES

17. Lead Plaintiffs Harry Lattanzio, PRS, Inc., Network Accreditation Services, Inc.,

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Andrew Silverman, and Rock 49th Restaurant Group purchased NYMOX common stock at

artificially inflated prices during the Class Period, as set forth in the certification previously filed

with the Court.

18. Defendant NYMOX is engaged in the research and development of therapeutics

and diagnostics, with an emphasis on products for the unmet needs of the aging population.

Since 2002, the Company has been developing a novel proprietary drug candidate, NX-1207, for

the treatment of benign prostatic hyperplasia (BPH) and its two Phase 3 Studies, the predicate for

applying to the FDA for approval for NX-1207. Through its operating history, NYMOX has

incurred operating losses, incurring a net loss of $9.7 million in 2011, $7.6 million in 2012 and

$4.9 million in 2013. Research and development expenses for 2011 were $9.5 million, for 2012

were $8.6 million, and for 2013 were $6.3 milion. The Company’s operations have primarily

been funded through common stock private purchase agreements. For example in November

2012, the Company signed a common stock private purchase agreement, whereby Lorros-Greyse

Investments Limited was committed to purchase up to $15 million of the Company’s common

shares over a twenty-four month period. The agreement became effective December 19, 2012.

Fifteen drawings were made under the November 2012 Common Stock Private Purchase

Agreement, for total proceeds of $6,000,0001 On November 1, 2013, NYMOX signed a new

• February 4, 2013, 153,610 common shares were issued at a price of $6.51 per share . • March 28, 2013, 214,425 common shares were issued at a price of $5.13 per share. • May 8, 2013, 40,404 common shares were issued at a price of $4.95 per share. • May 17, 2013, 72,917 common shares were issued at a price of $4.80 per share. • May 23, 2013, 61,100 common shares were issued at a price of $4.91 per share. • June 27, 2013, 40,080 common shares were issued at a price of $4.99 per share. • July 22, 2013, 54,446 common shares were issued at a price of $5.51 per share. • July 25, 2013, 34,305 common shares were issued at a price of $5.83 per share. • August 14, 2013, 78,125 common shares were issued at a price of $6.40 per share. • September 3, 2013, 49,157 common shares were issued at a price of $7.12 per share. • September 6, 2013, 39,683 common shares were issued at a price of $7.56 per share. • September 26, 2013, 49,261 common shares were issued at a price of $6.09 per share

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Common Stock Private Purchase Agreement, which became effective December 3, 2013,

whereby Lorros-Greyse was committed to purchase up to $15 million of Nymox’s common

shares over the twenty-four month period beginning in November 2013, subject to the same

terms and conditions as before. As at March 14, 2014, four drawings were made under the new

Common Stock Private Purchase Agreement, for total proceeds of $1,400,000.2 Previously, on

December 16, 2010, the Company signed a license and collaboration agreement with Recordati

Ireland Ltd. (“Recordati”), a European pharmaceutical group, for the development and

commercialization of NX-1207 in Europe, including Russia and the CIS, the Middle East, the

Maghreb area of North Africa and South Africa. The license and collaboration agreement covers

the use of NX-1207 for the treatment of BPH as the initial indication for development and

commercialization. Recordati made an upfront payment to the Company of €10,000,000

(US$13,088,000) in December 2010 and was supposed to make regulatory approval and sales

milestones payments, and tiered supply and royalty payments of a minimum of 26% to increase

progressively up to 40% of total net sales if the case specific contractual conditions are achieved.

However, as a result of the top-line failure for NYMOX’s Phase 3 studies of NX02-0017 and

NX02-0018, Recordati terminated its relationship with NYMOX.

19. Defendant Averback is the President and a Director of NYMOX since September

1995 and Chairman since June of 2001. He is the founder of NYMOX and the inventor of much

of its initial technology. Prior to founding NYMOX, he served as President of NYMOX’s

• October 22, 2013, 41,609 common shares were issued at a price of $7.21 per share • On November 15, 2013, 46,584 common shares were issued at a price of $6.44 per share. • On November 29, 2013, 44,510 common shares were issued at a price of $6.74 per share.

2

• On December 18, 2013, 48,544 common shares were issued at a price of $6.18 per share. • On January 14, 2014, 69,686 common shares were issued at a price of $5.74 per share. • On February 4, 2014, 61,533 common shares were issued at a price of $5.69 per share. • On February 28, 2014 62,297 common shares were issued at a price of $5.62 per share.

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predecessor, DMS Pharmaceuticals Inc. As of March 15, 2011, and March 15, 2012, the number

of common shares owned or controlled by Averback was 13,115,395. As of March 15, 2013, the

number of common shares owned or controlled by Averback was 12,239,914. It was reported on

April 2, 2013 that Averback sold 465,000 common shares in a private transaction for proceeds of

$1,999,500. As of March 15, 2014, the number of common shares owned or controlled by

Averback was 11,402,048. It was reported on August 6, 2014 that Averback sold 470,600

common shares in a private transaction for proceeds of $2.4 million. Thus, while Averback was

touting the successes of NX-1207, he was engaged in reducing his investment in the Company.

BEST PRACTICES FOR DRUG CLINICAL TRIALS AND COMMUNICATIONS WITH THE FDA

20. The FDA is responsible for granting “approval for new drugs after a sponsor

demonstrates that their benefits outweigh their risks for a specific population and a specific use,

and that the drug meets the statutory standard for safety and efficacy.” Statement of Steven

Galson, Acting Director Center for Drug Evaluation and Research (“CDER”), March 5, 2005.

The FDA’s authority is set forth in 21 C.F.R. 314 and the FDA’s current thinking with respect to

its policies and procedures are set forth in FDA guidance documents. The costs of the FDA

approval process are extensive (http://www.fda.gov/NewsEvents/Testimony/ucm161673.htm).

21. During all phases of clinical development, regulatory agencies require extensive

monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.

22. Sponsors of studies evaluating new drugs, biologics or devices are required to

monitor these studies. 21 CFR 312.5, 312.56 and 21 CFR 812.46. One such group is a Data

Monitoring Committee (“DMC”), which is appointed by a sponsor to evaluate the accumulating

data in some trials. In the FDA’s Guidance for Clinical Trial Sponsors, OMB Control No. 0910-

0581, issued March 2006,

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http://www.fda.gov/downloads/RegulatoryInformation/Guidances/ucm127073.pdf (“the

Guidance”), the selection of DMC members is extremely important. The sponsor generally

appoints members of a DMC. One of the major responsibilities of a DMC is to evaluate the

relative treatment effect based on protocol-specified endpoints to determine if the trial is meeting

its objectives. Guidance 4.3.2, p. 16. Typically, the monitoring plan will specify a statistical

approval that permits multiple interim reviews. “Statistical assessment may also suggest that

early termination of a trial be considered on the basis of futility . . . that the trial is unlikely to

meet its objectives and there is no basis for continuing enrollment and/or follow-up.” Id.

23. Since the 1962 Drug Amendments, it has been the FDA’s position “that Congress

generally intended to require at least two adequate and well-controlled studies, each convincing

on its own, to establish effectiveness.” See Guidance for Industry, Providing Clinical Evidence of

Effectiveness for Human Drug and Biological Products, May 1998,

http://www.fda.gov/downloads/Drugs/.../Guidances/ucm078749.pdf (“May 1998 Guidance”)

However, in the 1998 Guidance, the FDA acknowledged that it may “consider ‘data from one

adequate and well-controlled clinical investigation and confirmatory evidence’ to constitute

substantial evidence if FDA determines that such data and evidence are sufficient to establish

effectiveness.” May 1998 Guidance.

24. It is the generally accepted industry standard and consistent with industry best

practice for a sponsor to unblind Phase 3 study results as soon as they are available upon

completion of the study. Among the reasons for this practice is to avoid subjecting patients

being enrolled and participating in other Phase 3 trials of the same drug to continue in those trials

when the drug has shown to have failed and, if the drug has shown statistical significance, it

would be unethical to delay FDA approval and to withhold the drug from other patients.

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FACTUAL ALLEGATIONS GENERAL BACKGROUND INFORMATION ON NX-1207

25. On NYMOX’s website, defendants describe NX -1207 as a novel drug developed

for the treatment of BPH. NX-1207 is administered by a urologist in an office procedure that

takes a few minutes, does not require any type of anesthesia or catheterization, and involves little

or no pain or discomfort. Defendants have consistently touted the benefits of NX-1207 and

stated that it is superior to existing drugs on the market for the treatment of BPH, both in terms

of ease of administration and absence of serious side effects.

26. Prior to the Class Period, defendants conducted Phase 1 and Phase 2 clinical trials

of NX-1207 in the U.S. In 2009, defendants began two large Phase 3 studies of NX-1207. The

first, the NX02-0017 Study, called for the enrollment of 500 men and had a study start date of

April 2009. The study had two arms, Experimental: NX-1207 with a single intraprostatic

injection of 2.5 mg. and a Placebo Comparator with a single intraprostatic injection of placebo.

The enrolled patient had to participate in the study for one year. The final data collection date

was November 2013 and the study was completed in November 2013. However, defendants did

not release the Top-line results of the NX02-0017 Study until November 4, 2014, 12 months

after the Top-line were available to defendants and, under generally accepted industry standards

and practice, would have been known to defendants.

27. The second Phase 3 study, the NX02-0018 Study, also called for the enrollment of

500 men and had a study start date of May 2009. This study also had two arms, Experimental:

NX-1207, with a single intraprostatic injection of 2.5 mg. and a Placebo Comparator with a

single intraprostatic injection of placebo. The enrolled patient was required to participate in the

study for one year and during that year could not take any other drug to treat his BPH. The final

data collection date was May 2014 and the study was completed in May 2014. However,

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defendants did not release the Top-line results of the NX02-0018 Study until November 4, 2014,

six months after the Top-line results were available to defendants and, under generally accepted

industry standards and practice, would have been known to defendants.

28. Enrollment of 1000 men in the two Phase 3 studies was a very slow and difficult

process, as defendants knew it would be. To keep the market’s interest in NX-1207 during the

lengthy enrollment process and to obfuscate the problems with the design and conduct of the two

Phase 3 Studies, defendants began a campaign to disseminate as much positive information about

NX-1207, focusing on the two ongoing Phase 3 Studies and the results of prior smaller, shorter

Phase 2 studies of NX-1207, through the publication of News Releases and reporting on positive

presentations at meetings of the American Urological Association made by “friendly” doctors, as

well as through SEC filings.

CLASS PERIOD STATEMENTS

29. On January 31, 2011, NYMOX issued a News Release titled “January 28 Safety

Monitoring Committee Meeting For Nymox Pivotal Phase 3 NX-1207 Trials Indicates Favorable

Safety Profile.” The News Release stated that “Nymox Pharmaceutical Corporation (NASDAQ:

NYMX) provided an update on the Company’s Phase 3 pivotal trials for NX-1207, NYMOX’s

investigational drug for benign prostatic hyperplasia (BPH). The Safety Monitoring Committee

meeting of January 28, 2011 was favorable and indicated no significant safety concerns for the

two pivotal U.S. trials to date. Patient recruitment and trial activities for pivotal U.S. studies

NX02-0017 and NX02-0018 are proceeding well at over 70 well-known urology investigative

sites throughout the U.S.” The News Release touted a 2010 peer-reviewed publication stating:

“NX-1207: a novel investigational drug for the treatment of benign prostatic hyperplasia” in Expert Opinion on Investigational Drugs (2010 Feb;19(2):305- 10), the author, Neal Shore MD FACS, Medical Director of the Carolina Urologic Research Center, Myrtle Beach, SC, wrote “Regarding existing oral drug

16


therapies, the use of NX- 1207 would obviate daily and lifelong compliance issues as well as the ongoing concerns of polypharmacy facing the elderly and the attendant risk for drug–drug interactions. In comparison to office-based MIST options, the transrectal injection approach afforded by NX-1207, both anesthetic/analgesic free as well as catheter free, will be quite compelling to most patients. If the ongoing Phase III trials can duplicate the success seen in earlier trials, for both efficacy and safety, then the administration of NX-1207 should be expected to significantly impact the current pattern of treatment options employed by urologists for their patients with BPH.”

The News Release further discussed the presentation at the Annual Meeting of the American

Urological Association in June 2010, stating :

“Progress with NX-1207: Phase 3 Pro-Apoptotic Injectable for BPH,” was chaired by Neal Shore, MD, FACS of Myrtle Beach, SC. Panel members included Barrett Cowan, MD, FACS of Denver, CO, Barton Wachs, MD, FACS of Long Beach, CA, and Chris Threatt, MD of Atherton, CA, and included a new research report authored by Dr. Barrett Cowan, Dr. Kevin Cline of Shreveport, LA, Dr. Sheldon Freedman of Las Vegas, NV, Dr. Pat Hezmall of Arlington, TX, Dr. Barton Wachs, Dr. Chris Threatt, and Dr. Neal Shore. According to the report “NX-1207 is an office-based procedure involving only a few minutes to administer associated with minimal discomfort and no catheter requirement,” and “results indicate statistically significant symptomatic improvement and a very acceptable safety profile.”

30. These statements were materially misleading when made because defendants

knew that these earlier studies provided no reliable markers for the results of the ongoing two

Phase 3 Studies of NX-1207. Defendants knew that the study design of the Phase 3 Studies

relied solely on highly subjective answers by the study participants to a set of very general

questions as the sole end point and the measure of statistical significance. Thus, subjective

answers by a wholly different set of men in a differently designed study offered no reliable

marker of the answers that would be provided by the patients in the two Phase 3 Studies. For

example, none of the earlier studies required participants to remain enrolled for an entire year

and forego all other treatments for their BPH for that entire year. In addition, the design of the

two Phase 3 Studies virtually eliminated inclusion of “sicker” patients. This critical design

feature would adversely affect the difference in effect between drug and placebo in participants

17


in the two Phase 3 Studies and greatly enhance the placebo effect in the two Phase 3 Studies.

The earlier studies were not designed in such a way that the “sicker” patients would not

participate in the studies. Thus, the patient populations in these earlier studies were materially

different from those in the two Phase 3 Studies. This would significantly impact the results of

each study, making comparisons of the results highly misleading. In addition, defendants failed

to explain the study designs of these earlier studies leading to further confusion in describing the

results and offering them as markers for the results of the ongoing Phase 3 Studies.

31. On March 16, 2011, defendants issued a News Release titled "Nymox Announces

Positive New Results in 7 Year Study of NX-1207 for Benign Prostatic Hyperplasia.” The News

Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) today announced new 2011 positive results from a long term outcome study of NX-1207 for benign prostatic hyperplasia (BPH). The study evaluated symptomatic change and treatment status of patients involved in the Company’s NX02-0012 and NX02- 0013 Phase 1-2 U.S. studies of NX-1207 initially undertaken in 2003. The new data indicates that a significant percentage of patients given a single treatment of NX-1207 have now shown sustained improvement in their symptoms without other treatments for over 7 1/2 years.

Patients treated with NX-1207 were followed-up on an unselected and as available basis and assessed for symptomatic improvement, treatment outcomes, and durability of efficacy 7 1/2 years after a single treatment with NX-1207. As an inclusion criterion, all subjects enrolled in these studies were previous failures on conventional approved drug treatments. Data was available for 63% of the patients from the initial studies. Overall, 58% of the men in the new outcome study treated with NX-1207 reported no subsequent surgical treatment and no current drug treatment for their BPH and had an ongoing mean improvement of 11.7 points in AUA BPH Symptom Score 7 1/2 years after a single treatment with NX-1207. In addition, 38% of the patients treated with NX-1207 reported no prolonged use of any approved treatments at any time for their BPH since their original treatment with NX-1207, with a mean improvement of 13.7 points. There were no indications of any drug safety issues in any of the patients.

The Company has successfully reported four U.S. clinical trials of NX-1207 and conducted a series of long term follow-up studies of available subjects from those trials in order to monitor and assess long term safety and efficacy of NX-1207

18


treatment for BPH. The follow-up trials to date have provided further confirmation of the excellent safety and side effect profile of NX-1207 and evidence of enduring benefit for a significant percentage of patients treated with NX-1207.

This sustained improvement in AUA BPH symptom score after NX-1207 treatment compares favorably to the 3 to 5 points reported in published studies of currently approved BPH drugs, which, unlike NX-1207 treatment, require permanent daily administration to be effective. Currently approved drugs also have undesirable side effects such as loss of libido, impotence, retrograde ejaculation, dizziness, and other problems.

NX-1207 has entered its Phase 3 development program, the last stage before filing with the FDA for approval. NX-1207 is injected by a urologist in an office setting and involves little or no pain or discomfort. . . .





questions as the sole method by which statistical significance would be measured in the two

Phase 3 studies. Thus, subjective answers by a wholly different set of men in a differently

designed study offered no reliable marker of the answers that would be provided by the patients

in the two Phase 3 Studies. For example, none of the earlier studies required participants to

remain enrolled for an entire year and forego all other treatments for their BPH for that entire

year. In addition, the design of the two Phase 3 Studies virtually eliminated inclusion of “sicker”

patients. This critical design feature would adversely affect the difference in effect between drug

and placebo in participants in the two Phase 3 Studies and greatly enhance the placebo effect in

the two Phase 3 Studies. The earlier studies were not designed in such a way that the “sicker”

patients would not participate in the studies. Thus, the patient populations in these earlier studies

were materially different from those in the two Phase 3 Studies. This would significantly impact

19


the results of each study, making comparisons of the results highly misleading. In addition,

defendants failed to explain the study designs of these earlier studies leading to further confusion

in describing the results and offering them as markers for the results of the ongoing Phase 3

Studies.

33. Defendants’ disclosures about the availability of information on the Phase 3 trials

was misleading in that defendants did not follow best practices with respect to communications

and processes with the FDA as set forth at paragraphs 20-24.

34. On April 13, 2011 defendants issued a News Release titled “Nymox Announces

New Positive Long-Term 39-45 Month Follow-Up Results From NX02-0016 U.S. Study of NX-

1207 for BPH.” The News Release stated that “New Study Results Indicate Durable Clinical

Response to New Therapy for Enlarged Prostate Currently in Phase 3.” The News Release

stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) is pleased to report positive new results from the 39-45 month follow-up study of patients treated with NX-1207 in Study NX02-0016. The initial study, completed in the U.S. in 2007, reached statistical significance in Intent-to-Treat Primary Efficacy outcomes at 90 days and 6 months post-treatment with NX-1207 2.5 mg. The new study assessed American Urological Association BPH Symptom Index scores in blinded subjects without additional NX-1207 treatment after 39-45 months. There were no significant drug safety problems reported by any subjects in the study initially as well as in the new long-term follow-up.

Patients in the new study were followed and have remained blinded as to treatment subsequent to their participation in Nymox’s U.S. Study NX02-0016. The initial study was undertaken in 2007 at 32 U.S. sites and enrolled 85 subjects. The new study includes results from all currently available patients. The new study found that 54% of available patients who received NX-1207 2.5 mg had required no further medical or surgical treatments for their BPH at any time in the long-term follow-up period. Patients who received NX-1207 2.5 mg without any other subsequent treatment for their BPH had a mean improvement at 39-45 months of 11.5 points in their symptom scores. In the control group only one subject had not required any additional BPH treatments. The NX-1207 2.5 mg cohort’s level of improvement reached statistical significance. 58% of the NX-

20


1207 2.5 mg subjects and controls were available for the follow-up study. Additional data from this new long-term study will be released at a later date.

In the initial study’s Intent-to-Treat cohort after 90 days, the tested therapeutic dose of NX-1207 had a mean BPH Symptom Score improvement of 9.71 points, which was markedly better than the improvement shown by control groups (p<.001). In multicenter U.S. clinical trials to date NX-1207 has been found to produce improvements in BPH symptom score that are approximately double that reported for currently approved BPH drugs without the side effects associated with those drugs, which can include sexual problems (such as impotence, loss of libido, and retrograde ejaculation), blood pressure changes and other adverse reactions. Results of follow-up studies of available subjects from NX-1207 clinical trials have provided evidence of durable benefits from NX-1207 treatment for up to 71/2 years from the date of treatment.

NX-1207 is a novel patented drug developed by Nymox which is currently in Phase 3 trials. NX-1207 is injected by a urologist in an office setting and involves little or no pain or discomfort. . . .















21






Studies.

36. On May 4, 2011, defendants issued a News Release titled “Safety Monitoring

Committee Meeting Positive for Nymox Pivotal Phase 3 NX-1207 Trials. ” The News Release

stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) provided a further update today on the Company’s ongoing Phase 3 trials (NX02-0017 and NX02- 0018) for NX-1207, Nymox's investigational drug for benign prostatic hyperplasia (BPH). The Safety Monitoring Committee meeting of May 3, 2011 found no significant safety concerns to date for the two pivotal U.S. trials being conducted at over 70 urology clinical research sites across the U.S.

Completed Phase 2 studies have shown that a single administration of NX-1207 resulted in symptomatic improvements which reached statistical significance compared to double-blinded placebo and study controls. Patient-reported improvements in the standardized BPH symptom score were on average 8 to 10 points at 90 days as compared to the approximately 3 to 5 points reported on average for currently approved BPH drugs. The drug is administered by a urologist in an office setting in a brief procedure that does not require anesthesia, sedation, or catheterization and involves little or no pain or discomfort. NX-1207 treatment has not been found to have the sexual, blood pressure, or other side effects associated with the use of the approved drugs for the treatment of BPH. Follow-up studies have shown clinical efficacy effects lasting up to 7 years after a single treatment.






22















Studies.

38. On May 4, 2011, defendants issued a News Release titled “Nymox Announces

Clinical Trial NX02-0020.” The News Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) announced today that recruitment will begin for NX02-0020, a small open-label short-term safety study of NX-1207, the Company’s Phase 3 drug for benign prostatic hyperplasia (BPH). The study will enroll approximately 100-200 subjects who have already participated in previous studies of NX-1207. The study will assess the safety of repeat injection of the drug. Previous studies of NX-1207 have been single injection only. Eligible subjects will be enrolled from approximately 70 U.S. clinical trial sites.

The study will run concurrently with the large pivotal Phase 3 studies of NX-1207 which are ongoing. NX02-0020 is expected to be concluded before the pivotal studies NX02-0017 and NX02-0018 are completed. For each enrolled subject in the new trial, participation will last 90 days.

23


Dr. Paul Averback was quoted in the release as saying,

“The urologist clinical investigators are very pleased about the open-label NX-1207 now being available in Study NX02-0020 to their subjects who have completed the clinical trials. We are optimistic that the pivotal studies NX02-0017 and NX02-0018 will have full enrollment at a reasonable date. The 2 pivotal Phase 3 U.S. studies passed the 500 patient enrollment milestone several months ago.

We continue to negotiate and have discussions with a number of large marketing partners who have interest in licensing NX-1207 for the U.S. and for Asia, and we are very optimistic with regard to the next marketing partnership deal.”


knew that the enrollment in the two Phase 3 Studies faced significant difficulties and coupled

with the difficulty of keeping men participating for the one-year required timeframe was proving

exceedingly difficult and was significantly delaying completion of the both the NX-0017 Study

and the NX-0018 Study. Defendant Averback was deeply involved in both the design and

conduct of the two Phase 3 Studies and kept himself fully advised of all developments

concerning the two Phase 3 Studies. Prior to making these statements, he would necessarily

have determined both the rate of enrollment and the participation rate at each of the study

centers.

40. On May 17, 2011, defendants issued a News Release titled “New Positive Data on

NX-1207 Presented at Symposium at American Urological Association Annual Meeting - Panel

Discussion Highlights New Treatment for BPH.” The News Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) is pleased to report on the presentation of new positive data at a high-level symposium and panel discussion held at the Annual Meeting of the American Urological Association in Washington D.C. The symposium was held between 1:30 and 2:30 pm EDT on Tuesday. The well-attended symposium highlighted the ongoing clinical development program for NX-1207 for the treatment of benign prostatic hyperplasia (BPH) and featured expert panel discussions on the new therapy. The symposium, "Clinical Studies of NX-1207: A Phase 3 Injectable for BPH," was chaired by Neal Shore, MD, FACS of Myrtle Beach, SC. Panel members included

24


Ronald F. Tutrone Jr., MD, FACS of Towson, MD, Barrett Cowan, MD, FACS of Denver, CO, and Barton Wachs, MD, FACS of Long Beach, CA.

A new research report was presented at the NX-1207 symposium, authored by Dr. Barrett Cowan, Dr. Sheldon Freedman of Las Vegas, NV, Dr. Barton Wachs, and Dr. Neal Shore. The new data concerned outcome analyses of single-injection NX-1207 after 45 months in 53 patients. Subjects in the NX-1207 2.5 mg cohort had mean improvements in their BPH symptoms that reached statistical significance (p < .0001). According to the report "NX- 1207 is an office-based procedure involving only a few minutes to administer associated with minimal discomfort and no catheter requirement", and "results indicate statistically significant symptomatic improvement and a very acceptable safety profile".

According to Dr. Tutrone, “NX-1207 provides a whole new paradigm in the treatment of BPH. It offers terrific efficacy with minimal or no toxicity”. Dr. Tutrone is Director of Research at Chesapeake Urology Associates and Chief of Urology at the Greater Baltimore Medical Center.

According to Dr. Shore, "I am looking forward to the completion of our Phase 3 registration trials and the opportunity to treat men with lower urinary tract symptoms with

the first transrectal ultrasound guided injectable BPH medication.” Dr. Shore is a well known U.S. clinical investigator and expert in prostate diseases.

Dr. Wachs said, “I feel confident that this drug delivered by urologists will meet the challenges of BPH therapy in the future. Finally it appears there is a treatment for BPH without the potential side effects of oral or surgical therapy.” Dr. Wachs is a highly respected urologist who has been the recipient of numerous awards.

Dr. Cowan added “What urologists and patients want are treatments that are effective with no side effects and with results that are persistent – and that is what we are seeing with NX-1207.” Dr. Cowan is a well known clinical investigator and an Adjunct Faculty member at the University of Colorado Health Sciences.


25


41. These statements that defendants republished in a NYMOX News Release were

materially misleading when made because defendants knew that these earlier studies provided no

reliable markers for the results of the ongoing two Phase 3 Studies of NX-1207. Defendants

knew that the study design of the Phase 3 Studies relied solely on highly subjective answers by

the study participants to a set of very general questions as the sole method by which statistical

significance would be measured in the two Phase 3 studies. Thus, subjective answers by a

wholly different set of men in a differently designed study offered no reliable marker of the

answers that would be provided by the patients in the two Phase 3 Studies. For example, none of

the earlier studies required participants to remain enrolled for an entire year and forego all other

treatments for their BPH for that entire year. In addition, the design of the two Phase 3 Studies

virtually eliminated inclusion of “sicker” patients. This critical design feature would adversely

affect the difference in effect between drug and placebo in participants in the two Phase 3

Studies and greatly enhance the placebo effect in the two Phase II Studies. The earlier studies

were not designed in such a way that the “sicker” patients would not participate in the studies.

Thus, the patient populations in these earlier studies were materially different from those in the

two Phase 3 Studies. This would significantly impact the results of each study, making

comparisons of the results highly misleading. In addition, defendants failed to explain the study

designs of these earlier studies leading to further confusion in describing the results and offering

them as markers for the results of the ongoing Phase 3 Studies.

42. On August 17, 2011, defendants issued a News Release titled “August 16 Safety

Monitoring Committee Meeting For Nymox Pivotal Phase 3 NX-1207 Trials Indicates Favorable

Safety Profile.” The News Release stated:

26


Nymox Pharmaceutical Corporation (NASDAQ: NYMX) provided an update today on the Company’s Phase 3 pivotal trials for NX-1207, Nymox's investigational drug for benign prostatic hyperplasia (BPH). The Safety Monitoring Committee meeting of August 16, 2011 was favorable and indicated no significant safety concerns for the two pivotal U.S. trials to date. Patient recruitment and trial activities for pivotal U.S. studies NX02-0017 and NX02- 0018 are proceeding well at over 70 well-known urology investigative sites throughout the U.S.

NX-1207 has been shown to improve the signs and symptoms of BPH, producing improvements which reached statistical significance compared to double-blinded placebo and study controls. A single administration of NX-1207 2.5 mg has produced on average improvements in the standardized BPH symptom score (8- 10 points at 90 days) that were approximately double that reported for currently approved BPH drugs (3-5 points). The drug is administered by a urologist in an office setting and involves little or no pain or discomfort. NX-1207 has not been found to have the sexual, blood pressure, or other side effects of the approved drugs. Follow-up studies have shown clinical efficacy effects in many men lasting up to 7 1/2 years after a single treatment.

A symposium at the Annual Meeting of the American Urological Association May 17, 2011, “Clinical Studies of NX-1207: A Phase 3 Injectable for BPH," was chaired by Neal Shore, MD, FACS of Myrtle Beach, SC. Panel members included Ronald F. Tutrone Jr., MD, FACS of Towson, MD, Barrett Cowan, MD, FACS of Denver, CO, and Barton Wachs, MD, FACS of Long Beach, CA. and included a new research report authored by Dr. Barrett Cowan, Dr. Sheldon Freedman of Las Vegas, NV, Dr. Barton Wachs, and Dr. Neal Shore. According to the report "NX-1207 is an office-based procedure involving only a few minutes to administer associated with minimal discomfort and no catheter requirement", and "results indicate statistically significant symptomatic improvement and a very acceptable safety profile.”

43. These statements were materially false and misleading when made because the

data presented to the Safety Monitoring Committee showed that the placebo effect to date was

significantly higher than in previous studies and that the likelihood of the drug showing

statistical significance was greatly reduced. In addition, defendants knew from their

communications with the study centers that the rates of both enrollment and continued

participation in both Phase 3 Studies were significantly slowed and behind schedule because the

study design requiring a one-year term of participation without any further or additional

27


treatment for their BPH discouraged many men who had enrolled in the Studies from completing

the one-year participation term. Furthermore, Defendants knew that the earlier studies they

discussed did not require the men to participate for one year and that fact alone distinguished

significantly the patient population in the earlier studies from the patient populations who were

participating in the Phase 3 Studies. Defendants knew of these material differences in the patient

populations by reason of their communications with the study centers which had complete

information on the severity of the condition of each man who enrolled and continued to

participate in the Phase 3 Studies. Thus, defendants knew that these population differences

would significantly impact the results of both Phase 3 Studies, making comparisons to results of

earlier studies highly misleading.

44. On September 26, 2011, defendants issued a News Release titled “New Peer-

Reviewed Publication in Therapeutic Advances in Chronic Disease Features Nymox NX-1207

Drug for BPH.” The News Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) announced today the publication of a new peer-reviewed paper in Therapeutic Advances in Chronic Disease featuring NX-1207, the Company’s innovative treatment for benign prostatic hyperplasia (BPH). NX-1207 is currently in Phase 3 trials in the U.S. The paper, “The potential for NX-1207 in benign prostatic hyperplasia: an update for clinicians” is written by Neal Shore MD FACS, Medical Director of the Carolina Urologic Research Center, Myrtle Beach, SC and Barrett Cowan MD FACS of Urology Associates PC, Englewood, CO. Dr. Shore and Dr. Cowan are well known experts in urology and have participated as clinical investigators in clinical trials of NX-1207 as well as in multiple follow-up studies of the drug. The paper is available online at http://taj.sagepub.com/content/early/2011/09/23/2040622311423128.abstract.

In Authors Opinions, the authors write “The authors have both participated as clinical investigators in the NX-1207 trials, and have found the administration of the drug to be a quick and uncomplicated procedure which takes a few minutes only, and which can be easily done by urologists, most of whom do very similar injections on a routine basis (e.g. during prostate biopsy and prostate infiltrations). There is no need for any new or special equipment, and no special training will be required. Compared to existing oral drug therapies (alpha blockers and 5-alpha

28


reductase inhibitors), the use of NX-1207 does not have daily and lifelong compliance issues or the concerns of polypharmacy facing the aging population as well as the risk for drug-drug interactions. In addition, NX-1207 has not shown any of the bothersome and limiting sexual side effects of the oral therapies (such as impotence, loss of libido, or retrograde ejaculation).”

NX-1207 is a novel patented drug developed by Nymox which is currently in Phase 3 trials. The drug has successfully completed a series of blinded controlled multi-center U.S. clinical trials where a single dose of NX-1207 has been found to produce symptomatic improvements about double that reported for currently approved BPH drugs without causing the sexual or cardiovascular side effects associated with those drugs. Follow-up studies have shown evidence of long lasting benefit with a significant proportion of men who received a single dose reporting maintained improvement in BPH symptoms for up to 7 1/2 years.

















29




Studies

46. On October 19, 2011, defendants issued a News Release titled “New Positive

Data on NX-1207 Presented at Symposium at American Urological Association Meeting

October 19.” The News Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) is pleased to report on the podium presentation of new data on the long term safety and efficacy of the Company’s NX-1207 for benign prostatic hyperplasia (BPH) at the Annual Meeting of the North Central Section of the American Urological Association in Rancho Mirage, CA on October 19, 2011. Neal Shore MD FACS, the Medical Director of the Carolina Urologic Research Center and a highly experienced clinical trial investigator, reviewed the progress of the clinical trial program for NX-1207 to date and presented new analyses of long-term follow-up data for up to 6 1/2 years after a single treatment with NX-1207.

According to the peer-reviewed abstract at the meeting, “Overall at 3 to 6 1/2 years after a single treatment of NX- 1207, 37 to 55% of subjects required no surgical treatments or medication for their BPH. All Phase 2 follow-up study efficacy results reached statistical significance and there were no sexual side effects or significant adverse safety events attributable to study drug.” The authors of the abstract were Dr. Shore, Barrett Cowan MD FACS of Denver CO, Barton Wachs MD FACS of Long Beach CA, Chris Threatt MD of Atherton CA, Rafael Wurzel MD CPI of New Britain CT, Kevin Cline MD of Shreveport LA, and Sheldon Freedman MD FACS of Las Vegas NV.

Dr. Shore said, “Ongoing follow-up from prior trials of NX-1207 continues to demonstrate a favorable durability of effect”.

NX-1207 is currently being studied in two pivotal Phase 3 clinical trials, NX02- 0017 and NX02-0018, being conducted at approximately 70 urology clinics across the U.S.

Completed Phase 2 clinical trials showed that a single administration of NX-1207 resulted in symptomatic improvements which reached statistical significance compared to double-blinded placebo and study controls. Patient-reported improvements in the standardized BPH symptom score were on average 8 to 10 points at 90 days as compared to the approximately 3 to 5 points reported on average for currently approved BPH drugs. The drug is administered by a urologist in an office setting in a brief procedure that does not require anesthesia,

30


sedation, or catheterization and involves little or no pain or discomfort. NX-1207 treatment has not been found to have the sexual, blood pressure, or other side effects associated with the use of the approved drugs for the treatment of BPH.

Follow-up studies of available subjects from the completed clinical trials have shown clinical benefits in terms of long term symptomatic improvement or reduced need for subsequent treatment for up to 7 years following a single NX-1207 treatment.



















Studies.

31


48. On November 22, 2011, defendants issued a News Release titled “Nymox

Provides Safety Monitoring Committee Results and Update For Pivotal Phase 3 NX-1207

Trials.” The News Release stated :

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) provided an update today on the Company’s Phase 3 pivotal trials for NX-1207, Nymox’s investigational drug for benign prostatic hyperplasia (BPH). The Safety Monitoring Committee meeting of November 15, 2011 was favorable and indicated no significant safety concerns for the two pivotal U.S. trials to date. Patient recruitment and trial activities for pivotal U.S. studies NX02-0017 and NX02-0018 are ongoing at over 80 well-known urology investigative sites throughout the U.S. Accrual numbers for Trial NX02-0017 have reached approximately 80%, and steady progress has been made toward full enrollment for the pivotal studies.

Recent podium, panel, and moderated poster presentations concerning positive long-term clinical outcomes from trials of NX-1207 for BPH were given by independent investigators involved in the NX-1207 trials, to the American Urological Association at meetings in Washington DC, Rancho Mirage CA, New Orleans LA, and Orlando FL. A new peer-reviewed paper in Therapeutic Advances in Chronic Disease featuring NX-1207 was recently published entitled, “The potential for NX-1207 in benign prostatic hyperplasia: an update for clinicians” written by Neal Shore MD FACS, Medical Director of the Carolina Urologic Research Center, Myrtle Beach, SC and Barrett Cowan MD FACS of Urology Associates PC, Englewood, CO. Dr. Shore and Dr. Cowan are well known experts in urology and have participated as clinical investigators in clinical trials of NX-1207 as well as in multiple follow-up studies of the drug.

NX-1207 has been shown to improve the signs and symptoms of BPH, producing improvements which reached statistical significance compared to double-blinded placebo and study controls. A single administration of NX-1207 2.5 mg has produced on average improvements in the standardized BPH symptom score (8- 10 points at 90 days) that were approximately double that reported for currently approved BPH drugs (3-5 points). The drug is administered by a urologist in an office setting and involves little or no pain or discomfort. NX-1207 has not been found to have the sexual, blood pressure, or other side effects of the approved drugs. Follow-up studies have shown clinical efficacy effects in many men lasting up to 7 1/2 years after a single treatment.

49. On February 15, 2012, defendants issued a News Release titled “Nymox

Announces Current Safety Monitoring Committee Results and Update For Phase 3 NX-1207

Trials.” The News Release stated :

32


Nymox Pharmaceutical Corporation (NASDAQ: NYMX) provided an update today on the Company’s Phase 3 U.S. trials for NX-1207, Nymox's investigational drug for benign prostatic hyperplasia (BPH). The Safety Monitoring Committee meeting of February 14, 2012 was favorable and indicated no significant safety concerns for the three ongoing U.S. Phase 3 trials to date. Patient recruitment and trial activities for U.S. Phase 3 studies NX02-0017, NX02-0018 and NX02-0020 are ongoing at over 80 well-known urology investigative sites throughout the U.S. Overall accrual numbers for Trials NX02- 0017, NX02-0018 and NX02-0020 have reached approximately 980 patients, and good progress is being made toward full enrollment for the pivotal studies.

NX-1207 has been shown to improve the signs and symptoms of BPH, producing improvements which reached statistical significance compared to double-blinded placebo and study controls. A single administration of NX-1207 2.5 mg has produced on average improvements in the standardized BPH symptom score (8- 10 points at 90 days) that were approximately double that reported for currently approved BPH drugs (3-5 points). The drug is administered by a urologist in an office setting and involves little or no pain or discomfort. NX-1207 has not been found to have the sexual, blood pressure, or other side effects of the approved drugs. Follow-up studies have shown clinical efficacy effects in many men lasting up to 71/2 years after a single treatment.

Positive long-term clinical outcomes from trials of NX-1207 for BPH were given by independent investigators involved in the NX-1207 trials, to the American Urological Association at meetings in Washington DC, Rancho Mirage CA, New Orleans LA, and Orlando FL in October and November 2011. A recent peer-reviewed paper in Therapeutic Advances in Chronic Disease featuring NX-1207 was published in November 2011 entitled, “The potential for NX-1207 in benign prostatic hyperplasia: an update for clinicians” written by Neal Shore MD FACS, Medical Director of the Carolina Urologic Research Center, Myrtle Beach, SC and Barrett Cowan MD FACS of Urology Associates PC, Englewood, CO. Dr. Shore and Dr. Cowan are well known experts in urology and have participated as clinical investigators in clinical trials of NX- 1207 as well as in multiple follow-up studies of the drug.

50. These statements in paragraphs 48 and 49 were materially false and misleading

when made. Without explanation, defendants made unclear the number of study centers, in some

releases increasing the number of study centers from 70 to 80, in other releases increasing the

number while including another study. This was due in large measure to the difficulties with

patient enrollment and participation being experienced in the two Phase 3 Studies due to the

study design. Defendants knew of these problems from their communications with the study

33


centers. In addition, the data presented to the Safety Monitoring Committee showed that the

placebo effect to date was significantly higher than in previous studies and that the likelihood of

the drug showing statistical significance was greatly reduced. Defendants knew that the

differences in study design between the earlier studies and the ongoing Phase 3 Studies were

impacting and would continue to significantly impact the results of both Phase 3 Studies, making

comparisons to results of earlier studies highly misleading.

51. On March 26, 2012, defendants issued a News Release titled “Nymox Announces

New Positive Long-Term Follow-Up Study Results for Subjects Treated with NX-1207 for

BPH.” The News Release stated :

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) is pleased to report positive new results from the 52-56 month follow-up study of patients who participated in the company’s U.S. Study NX02- 0016 of NX-1207 for the treatment of BPH (benign prostatic hyperplasia or enlarged prostate) completed in 2007. The results of the follow-up study provided evidence confirming the durable benefits from NX-1207 treatment for BPH. Two blinded placebo-controlled Phase III studies of NX-1207 2.5 mg for the treatment of BPH as well as a third open label safety study are currently underway in the U.S. and nearing full enrollment. The company and its European partner, Recordati, recently announced the start of a Phase III clinical trial in Europe for NX-1207 for BPH.

The new follow-up study assessed American Urological Association BPH Symptom Index scores and treatment outcomes in blinded subjects 52-56 months after a single initial injection of NX-1207 2.5 mg. No significant drug safety problems were reported by any subjects in the study initially as well as in the new long-term follow-up. The new follow-up study found that of the patients who received NX-1207 2.5 mg, 52% were not currently taking BPH medication and had not received surgical treatments for their BPH; and 36% had required no medical or surgical treatments for their BPH since receiving their initial dose of NX-1207 2.5 mg. In the control group only one subject had not required any additional BPH treatments. The 36% of patients who received NX-1207 2.5 mg and did not require any other subsequent treatment for their BPH reported on average a 12.5 point improvement in their BPH symptom scores at 52-56 months; the 52% not currently taking BPH medication reported an average 10.0 point improvement. The level of symptomatic improvement for both NX-1207 2.5 mg cohorts reached statistical significance.

34


In the new follow-up study patients were followed and have remained blinded as to treatment subsequent to their participation in Nymox’s U.S. Study NX02-0016. The initial study was undertaken in 2007 at 32 U.S. sites and enrolled 85 subjects. 53% of the NX-1207 2.5 mg subjects and controls were available for the follow-up study.

In the initial NX02-0016 study’s Intent-to-Treat cohort after 90 days, patients treated with NX-1207 2.5 mg had a mean BPH Symptom Score improvement of 9.71 points, which was markedly better than the improvement shown by control groups (p<.001). The tested therapeutic dose of NX-1207 2.5 mg also reached statistical significance in Intent-to-Treat Primary Efficacy outcomes at 6 months post-treatment.

NX-1207 is a novel patented drug developed by Nymox that is injected directly into the prostate by a urologist in an office setting and involves little or no pain or discomfort. In multicenter U.S. clinical trials to date NX-1207 has been found to produce improvements in BPH symptom score that are approximately double that reported for currently approved BPH drugs without the side effects associated with those drugs, which can include sexual problems (such as impotence, loss of libido, and retrograde ejaculation), blood pressure changes and other adverse reactions. Results of earlier follow-up studies of subjects from NX-1207 clinical trials have provided evidence of durable benefits from NX-1207 treatment for up to 71/2 years from the date of treatment.

52. These statements were materially false and misleading. Defendants continued to

obfuscate the status and potential results of the ongoing two Phase 3 Studies by misleading the

market with comparisons between past study results and the forthcoming results of the two Phase

3 Studies. Defendants knew that these earlier studies provided no reliable markers for the results

of the ongoing two Phase 3 Studies of NX-1207. Defendants knew that the study design of the

Phase 3 Studies relied solely on highly subjective answers by the study participants to a set of

very general questions as the sole method by which statistical significance would be measured in

the two Phase 3 studies. Thus, subjective answers by a wholly different set of men in a

differently designed study offered no reliable marker of the answers that would be provided by

the patients in the two Phase 3 Studies. For example, none of the earlier studies required

participants to remain enrolled for an entire year and forego all other treatments for their BPH for

35


that entire year. In addition, the design of the two Phase 3 Studies virtually eliminated inclusion

of “sicker” patients. This critical design feature would adversely affect the difference in effect

between drug and placebo in participants in the two Phase 3 Studies and greatly enhance the

placebo effect in the two Phase 3 Studies. The earlier studies were not designed in such a way

that the “sicker” patients would not participate in the studies. Thus, the patient populations in

these earlier studies were materially different from those in the two Phase 3 Studies. This would

significantly impact the results of each study, making comparisons of the results highly

misleading. In addition, defendants failed to explain the study designs of these earlier studies

leading to further confusion in describing the results and offering them as markers for the results

of the ongoing Phase 3 Studies.

53. On April 26, 2012, defendants issued a News Release titled “Nymox Announces

Positive Safety Monitoring Committee Results for Phase 3 NX-1207 Trials for BPH.” The News

Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) provided an update today on the Company’s Phase 3 U.S. trials for NX-1207, Nymox’s investigational drug for benign prostatic hyperplasia (BPH). The most recent Safety Monitoring Committee meeting was favorable and indicated no significant safety concerns for the three ongoing U.S. Phase 3 trials to date. Patient recruitment and trial activities for U.S. Phase 3 studies NX02- 0017, NX02-0018 and NX02-0020 are ongoing and nearing completion at over 80 well-known urology investigative sites throughout the U.S.

NX-1207 has been shown to improve the signs and symptoms of BPH, producing improvements which reached statistical significance compared to double-blinded placebo and study controls. A single administration of NX-1207 2.5 mg has produced on average improvements in the standardized BPH symptom score (8- 10 points at 90 days) that were approximately double that reported for currently approved BPH drugs (3-5 points). The drug is administered by a urologist in an office setting and involves little or no pain or discomfort. NX-1207 has not been found to have the sexual, blood pressure, or other side effects of the approved drugs. Follow-up studies have shown clinical efficacy effects in many men lasting up to 71/2 years after a single treatment.

36


A symposium and panel discussion on NX-1207 will be held at the 2012 Annual Meeting of the American Urological Association in Atlanta on May 20 at the Georgia World Congress Center. The symposium, “Clinical studies of NX-1207: Phase 3 Injectable for BPH,” will be chaired by Ronald Tutrone Jr, MD, FACS of Towson, MD, who has participated in three of the prospective NX-1207 clinical trials as well as follow-up studies. Dr. Tutrone will present an overview of NX- 1207 and the NX-1207 clinical trials to date, including the two Phase 3 clinical trials currently in progress. Barton H. Wachs, MD, FACS, of Long Beach, CA, will present data from the new studies of the long-term efficacy of NX-1207 treatment. Mohamed Bidair, MD, FACS(C) of San Diego, CA, and Nicholas Franco, MD, FACS of Naples, FL will participate in the panel discussion in the symposium, along with Dr. Tutrone and Dr. Wachs. All four symposium panelists are distinguished Board-certified urologists with extensive experience as clinical investigators in FDA-regulated clinical trials, including the NX-1207 clinical trials.

Positive long-term clinical outcome data from studies of NX-1207 for BPH were presented by independent investigators involved in the NX-1207 trials, at American Urological Association meetings in Washington DC, Rancho Mirage CA, New Orleans LA, and Orlando FL in October and November 2011. A recent peer-reviewed paper in Therapeutic Advances in Chronic Disease featuring NX-1207 was published in November 2011. The paper, “The potential for NX-1207 in benign prostatic hyperplasia: an update for clinicians” was authored by Neal Shore MD FACS, Medical Director of the Carolina Urologic Research Center, Myrtle Beach, SC and Barrett Cowan MD FACS of Urology Associates PC, Englewood, CO. Dr. Shore and Dr. Cowan are well known experts in urology and have participated as clinical investigators in clinical trials of NX-1207 as well as in multiple follow-up studies of the drug.

54. These statements were materially false and misleading when made. Defendants

continued to experience delays in the enrollment and participation of men in both Phase 3

Studies which would adversely affect their completion dates. Defendants knew of these

problems from their communications with the study centers. In addition, the data presented to

the Safety Monitoring Committee showed that the placebo effect to date was significantly higher

than in previous studies and that the likelihood of the drug showing statistical significance was

greatly reduced. Defendants knew that the differences in study design between the earlier

studies and the ongoing Phase 3 Studies were impacting and would continue to significantly

37


impact the results of both Phase 3 Studies, making comparisons to results of earlier studies

highly misleading.

55. On May 21, 2012, defendants issued a News Release titled “New Positive Data on

NX-1207 Presented at Symposium and Panel Discussion at American Urological Association

Annual Meeting -- Panel Discussion Highlights New Treatment for BPH.” The News Release

stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) is pleased to report on the presentation of new positive data at a high-level symposium and panel discussion held Sunday at the Annual Meeting of the American Urological Association in Atlanta, GA. The symposium was held between 3:00 and 4:00 pm EDT on Sunday. The well-attended symposium highlighted the ongoing clinical development program for NX-1207 for the treatment of benign prostatic hyperplasia (BPH) and featured expert panel discussions on the new therapy. The symposium, “Clinical studies of NX-1207: Phase 3 injectable for BPH” was chaired by Ronald F. Tutrone Jr., MD, FACS of Towson, MD. Panel members included Barton Wachs, MD, FACS of Long Beach, CA, Nicholas Franco MD of Naples, FL and Mohamed Bidair MD of San Diego, CA.

A new research report was presented at the NX-1207 symposium, authored by Dr. Barton Wachs, Dr. Sheldon Freedman of Las Vegas, NV, Dr. Barrett Cowan of Denver, CO, and Dr. Neal Shore of Myrtle Beach, SC. The new data concerned outcome analyses of single-injection NX-1207 after 4 ½ years in 45 patients. Subjects in the NX- 1207 2.5 mg cohort had mean improvements in their BPH symptoms that reached statistical significance (p < .0001). According to the report “NX-1207 is an office-based” procedure involving only a few minutes to administer associated with minimal discomfort and no catheter requirement,” and “results at 52-56 months after a single treatment indicate statistically significant symptomatic improvement and a very acceptable safety profile.”

According to Dr. Tutrone, “NX-1207 for the treatment of enlarged prostate allows the urologist to treat their BPH patients with a single in-office injection procedure that requires no anesthesia or catheter, has virtually no adverse effects and has substantial efficacy. The patient can return to work the same day as the injection and can have lasting efficacy up to many years. Urologists have long awaited a new treatment paradigm that does not require daily oral medications or invasive surgical procedures yet affords the patient a safe and effective treatment that may give them long term relief from the symptoms of an enlarged prostate. It has a very strong possibility of becoming a first-line therapy for the treatment of enlarged prostate.” Dr. Tutrone is Director of Research at Chesapeake Urology Associates and Chief of Urology at the Greater Baltimore Medical Center.

38


According to Dr. Franco, “Nymox NX-1207's combination of office convenience and painless efficacy will make it very popular to the vast majority of urologists. It will be easy to incorporate into a normal day's schedule.” Dr. Franco is a well known U.S. clinical investigator and expert in prostate diseases based in Naples, FL.

Dr. Wachs said, “NX-1207 uniquely establishes the concept of treating an enlarged prostate by direct injection, which make more sense than any other type of therapy, drug or surgery. Direct injection is the wave of the future.” Dr. Wachs is a highly respected urologist who has been the recipient of numerous awards.

Dr. Bidair added, “The first thing one recognizes about NX-1207 is its ease of use. It is well tolerated, has a minimum of side effects, and minimal discomfort.” Dr. Bidair is a well known clinical investigator with extensive clinical research experience.

NX-1207 is also being tested in Phase 3 for BPH in Europe in collaboration with Recordati SpA, Nymox’s European partner. NEWS RELEASE

Phase 2 studies of NX-1207 for low grade localized prostate cancer have begun in the U.S. in 2012.







39















Studies.

57. On July 17, 2012, defendants issued a News Release titled “Favorable July 12

Safety Monitoring Committee Meeting For Nymox Pivotal Phase 3 NX-1207 Trials.” The News

Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) provided an update today on the Company’s Phase 3 pivotal trials for NX-1207, Nymox’s investigational drug for benign prostatic hyperplasia (BPH). The Safety Monitoring Committee meeting of July 12, 2012 was favorable and indicated no significant safety concerns for the two pivotal U.S. trials to date. Patient recruitment and trial activities for pivotal U.S. studies NX02-0017 and NX02- 0018 are nearing completion at over 70 well-known urology investigative sites throughout the U.S.

NX-1207 has been found in previous studies to improve the signs and symptoms of BPH, producing improvements which reached statistical significance compared to double-blinded placebo and study controls. A single administration of NX-

40


1207 2.5 mg has produced on average improvements in the standardized BPH symptom score (8-10 points at 90 days) that were approximately double that reported for currently approved BPH drugs (3-5 points). The drug is administered by a urologist in an office setting and involves little or no pain or discomfort. NX-1207 has not been found to have the sexual, blood pressure, or other side effects of the approved drugs. Follow-up studies have shown clinical efficacy effects in many men lasting up to 7 1/2 years after a single treatment.

58. These statements were materially false and misleading when made. Defendants

knew that enrollment and participation in the two Phase 3 Studies was experiencing significant

difficulties and causing significant delays in the completion of both studies. In addition, the data

presented to the Safety Monitoring Committee showed that the placebo effect to date was

significantly higher than in previous studies and that the likelihood of the drug showing

statistical significance was greatly reduced. Defendants knew that the differences in study

design between the earlier studies and the ongoing Phase 3 Studies were impacting and would

continue to significantly impact the results of both Phase 3 Studies, making comparisons to

results of earlier studies highly misleading.

59. On July 31, 2012, defendants issued a News Release titled “Nymox Reports

Positive Results from Combined Statistical Analysis of Long Term Follow-up Studies of BPH

Drug.” The News Release stated :

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) reported positive results from a new study of long-term treatment outcomes for men who had received a single injection of NX-1207 2.5 mg for treatment for their benign prostatic hyperplasia (BPH). The study analysis found that a statistically significant greater number of men who had received NX-1207 2.5 mg reported positive treatment outcomes as compared to men who had received a placebo. The study involved the latest available blinded follow-up study data (an average of 57 months postinjection) from the completed clinical trials for these treatment groups. A positive treatment outcome was seen if the patient was not using other BPH medications and no surgical treatment (including MIST) for BPH was reported at any time during the post-injection follow-up period.

The combined new statistical analysis of blinded study data showed NX-1207 2.5 mg to have a lasting benefit in terms of positive treatment outcomes that was

41


significantly superior to placebo (p=.02). Previous follow-up studies have shown long-term benefit from a single NX-1207 treatment in excess of 5 years in some cases.

Nymox recently provided an update on the Company’s Phase 3 pivotal trials for NX-1207. The Safety Monitoring Committee meeting of July 12, 2012 was favorable and indicated no significant safety concerns for the two pivotal U.S. trials to date. Patient recruitment and trial activities for pivotal U.S. studies NX02-0017 and NX02-0018 are nearing completion at over 70 well-known urology investigative sites throughout the U.S.

NX-1207 has been found in previous studies to improve the signs and symptoms of BPH, producing improvements which reached statistical significance compared to double-blinded placebo and study controls. A single administration of NX- 1207 2.5 mg has produced on average improvements in the standardized BPH symptom score (8-10 points at 90 days) that were approximately double that reported for currently approved BPH drugs (3-5 points). The drug is administered by a urologist in an office setting and involves little or no pain or discomfort. NX-1207 has not been found to have the sexual, blood pressure, or other side effects of the approved drugs.













the two Phase II Studies. The earlier studies were not designed in such a way that the “sicker”

42







Studies.

61. On September 12, 2012, defendants issued a News Release titled “Nymox

Reports Positive Safety Monitoring Committee Results For Pivotal Phase 3 Trials.” The News

Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) reported favorable results from the most recent Safety Monitoring Committee review of ongoing safety data for the Company’s Phase 3 pivotal trials for NX-1207, Nymox’s investigational drug for benign prostatic hyperplasia (BPH). The September 4, 2012 Safety Monitoring Committee meeting found no significant safety concerns to date. The two Phase 3 trials, NX02-0017 and NX02-0018, are continuing with patient recruitment and trial activities nearing completion at over 70 well-known urology investigative sites across the U.S.

Previous clinical trials found that a single administration of NX-1207 2.5 mg produced on average improvements in the standardized BPH symptom score (8- 10 points at 90 days) that were approximately double that reported for currently approved BPH drugs (3-5 points) without the sexual, blood pressure, or other side effects associated with the approved drugs. Follow-up studies have shown durable clinically significant benefit for up to 7 1/2 years after a single treatment. NX-1207 is administered in an office setting by a urologist. The procedure does not require anesthesia, sedation or catheterization and involves little or no pain or discomfort.

62. These statements were false and misleading when made. Defendants knew that

enrollment and participation in the two Phase 3 Studies was experiencing significant difficulties

and causing significant delays in the completion of both studies. In addition, the data presented

to the Safety Monitoring Committee showed that the placebo effect to date was significantly

higher than in previous studies and that the likelihood of the drug showing statistical significance

43


was greatly reduced. Defendants knew that the differences in study design between the earlier

studies and the ongoing Phase 3 Studies were impacting and would continue to significantly

impact the results of both Phase 3 Studies, making comparisons to results of earlier studies

highly misleading.

63. On November 28, 2012, defendants issued a News Release titled “Nymox

Announces Completion of Patient Enrollment in Pivotal U.S. Phase 3 BPH Study.” The News

Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) announced today completion of patient enrollment in the Company’s pivotal U.S. Phase 3 NX02- 0017 Study of NX-1207 for BPH. This study is now closed to further enrollment. Top-line results from the large Phase 3 Study are expected in late 2013.

Defendant Averback was quoted in the release as saying,

“Our drug development programs for NX-1207 include pivotal studies in the U.S. and Europe, re-injection studies in the U.S., prostate cancer trials, and other clinical and non-clinical research activities. Over 2000 patients have participated to date in NX-1207 trials. Final completion of enrollment in this major pivotal study is an important milestone in the NX-1207 development pathway. We look forward to further milestones as this and other trials are completed and results are reported.”

64. Defendants’ statement that they expected to release the Top-line results from the

NX-0017 Study in “late 2013” was materially false and misleading when made because, as

subsequent events proved, and contrary to generally accepted industry practice, defendants had

no intention of releasing the Top-line results if they did not show statistical significance. Rather,

defendants would wait until the close of the NX-0018 Study in an effort to merge the results of

the two studies in an effort to achieve statistical significance.

65. On February 19, 2013, defendants issued a News Release titled “Nymox

Announces Positive Immunogenicity Results for NX-1207 BPH Program.” The News Release

stated:

44


Nymox Pharmaceutical Corporation (NASDAQ: NYMX) is pleased to announce its lead drug candidate, NX-1207, has not shown any evidence of eliciting an immune reaction in men treated with intraprostatic injections of the drug. Extensive clinical immunogenicity testing of men in the Company’s pivotal Phase 3 trials (NX02-0017 and NX02-0018) and Phase 3 repeat injection safety study (NX02-0020) showed no evidence of antidrug antibody formation. Periodic safety monitoring reviews of the NX-1207 trials to date have shown no evidence of any allergic reaction to the drug either on first injection or repeat injection.

Positive immunogenicity testing of NX-1207 is an important step in the Company’s drug development program. The results are consistent with the pharmacological and pharmacokinetic profile of the drug and augment the extensive safety experience with the drug in men with over 1,000 men having received the drug to date.

The Company will present more detailed scientific data from these studies at upcoming medical conferences. NX-1207 is in late stage Phase 3 development in the U.S. for the treatment of benign prostatic hyperplasia (BPH), a common condition of older men associated with growth in prostate size as men age. The Company’s NX02-0017 pivotal Phase 3 trial has completed enrollment. Phase 3 trial activities of NX-1207 for BPH have begun in Europe sponsored by Recordati S.p.A., the company's European licensing partner. In the BPH studies to date, a single dose of NX-1207 has been found to produce symptomatic improvements about double that reported for currently approved BPH drugs without causing the sexual or cardiovascular side effects associated with those drugs.

66. On March 18, 2013, defendants issued a News Release titled “Nymox Announces

Presentation of NX-1207 Data at Annual Meeting of the European Association of Urology.” The

News Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) is pleased to report on the presentation of data on NX-1207, the Company’s novel patented drug, at the European Association of Urology's annual meeting held in Milan, Italy. NX-1207 is currently in Phase 3 trials for benign prostatic hyperplasia (BPH) and in a Phase 2 trial for localized prostate cancer. Ronald Tutrone Jr, MD, FACS, the Medical Director of the Chesapeake Urology Research Associates of Towson, MD and an investigator in three prospective NX-1207 clinical trials as well as follow-up studies, presented new safety and immunological data in a detailed overview of the ongoing clinical development program for NX-1207 for the treatment of BPH entitled “Clinical Studies of NX-1207: Phase 3 Injectable for BPH.”

Dr. Tutrone said “We have a large experience with many of our patients with NX- 1207. We are very confident that the majority of patients will find NX-1207 to be

45


the most attractive first line treatment for prostate enlargement once it becomes available.”

Dr. Tutrone added “This is a new treatment paradigm for BPH with an excellent safety profile, and efficacy that is much better than standard medical therapy. It is office based and takes less than 2 minutes with no anesthesia and no catheter.”

NX-1207 is in late stage Phase 3 development in the U.S. for the treatment of BPH, a common condition of older men associated with growth in prostate size as men age. Phase 3 trial activities of NX-1207 for BPH have begun in Europe sponsored by Recordati S.p.A., the company's European licensing partner. In the BPH studies to date, a single dose of NX-1207 has been found to produce symptomatic improvements about double that reported for currently approved BPH drugs without causing the sexual or cardiovascular side effects associated with those drugs. Follow-up studies have shown evidence of long lasting benefit with a significant proportion of men who received a single dose reporting maintained improvement in BPH symptoms without other treatments for up to 71/2 years.

67. These statements in paragraphs 65 and 66 were materially misleading when made

because defendants knew that these earlier studies provided no reliable markers for the results of

the ongoing two Phase 3 Studies of NX-1207. Defendants knew that the study design of the

Phase 3 Studies relied solely on highly subjective answers by the study participants to a set of

very general questions as the sole method by which statistical significance would be measured in

the two Phase 3 studies. Thus, subjective answers by a wholly different set of men in a

differently designed study offered no reliable marker of the answers that would be provided by

the patients in the two Phase 3 Studies. For example, none of the earlier studies required

participants to remain enrolled for an entire year and forego all other treatments for their BPH for

that entire year. In addition, the design of the two Phase 3 Studies virtually eliminated inclusion

of “sicker” patients. This critical design feature would adversely affect the difference in effect

between drug and placebo in participants in the two Phase 3 Studies and greatly enhance the

placebo effect in the two Phase II Studies. The earlier studies were not designed in such a way

that the “sicker” patients would not participate in the studies. Thus, the patient populations in

46


these earlier studies were materially different from those in the two Phase 3 Studies. This would

significantly impact the results of each study, making comparisons of the results highly

misleading. In addition, defendants failed to explain the study designs of these earlier studies

leading to further confusion in describing the results and offering them as markers for the results

of the ongoing Phase 3 Studies.


Completion of Patient Enrollment in Final Pivotal U.S. Phase 3 BPH Study.” The News

Release:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) announced today completion of patient enrollment in the Company’s final pivotal U.S. Phase 3 NX02-0018 Study of NX-1207 for BPH. This study is now closed to further enrollment. Top-line results from the large Phase 3 Study are expected in early 2014.

Defendant Averback was quoted as saying,

“Our drug development programs for NX-1207 include 6 large important studies in the U.S. and Europe, and other clinical and non-clinical research activities. Final completion of enrollment in this last major pivotal U.S. study is an important milestone in the NX-1207 development pathway. We look forward to reporting further news.”

69. Defendants’ statement that they expected to release the Top-line results from the

NX-0018 Study in “early 2014” was materially false and misleading when made because, as

subsequent events proved, and contrary to generally accepted practice, defendants had no

intention of releasing the Top-line results if they did not show statistical significance. Rather,

defendants would continue their efforts to manipulate the results of both the NX02-0017 Study

and the NX02-0018 Study in an effort to achieve statistical significance before releasing the Top-

line results. Indeed, to date defendants have never released the full results of either Phase 3

Study.

47


70. On November 14, 2013, Nymox filed with the SEC a Form 6-K for the period

ended September 30, 2013. This Form 6-K was signed by defendant Averback. In his message

to shareholders, defendeant Averback reported that:

a. On July 11, 2013, Nymox reported favorable results from the July 9, 2013 Safety Monitoring Committee meeting of ongoing safety data for the Company’s NX02- 0017 clinical trial for benign prostatic hyperplasia (BPH).

b. On August 22, 2013, Nymox reported favorable results from the August 20, 2013 Safety Monitoring Committee review of safety data for the Company’s NX02- 0018 clinical trial. The meetings found no significant safety concerns.

71. On January 28, 2014, defendants issued a News Release titled “Nymox Provides

Update on NX-1207 Phase 3 BPH and Phase 2 Prostate Cancer Clinical Trial Activities.” The

News Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) today provided updates on pivotal Phase 3 development activities for NX-1207, the Company’s Phase 3 drug for benign prostatic hyperplasia (BPH), a common affliction of older men. NX-1207 is also in development in Phase 2 for localized prostate cancer. The Company’s two large pivotal prospective double blind placebo-controlled U.S. clinical trials (NX02-0017 and NX02-0018) have completed enrollment.

Patient participation in the NX02-0017 U.S. pivotal Phase 3 BPH study is completed. Patient participation in the second U.S. pivotal trial, NX02-0018, will be completed in Q2 2014. Upon completion of patient participation and blinded data verification and monitoring procedures and auditing activities, unblinding and data analyses of the two pivotal studies will commence at the appropriate time in Q2 2014 with top line results being reported expeditiously when available.

72. Defendants’ statements as to the release of Top-line results from the two Phase 3

Studies were materially false and misleading when made. Even though defendants had the Top-

line results from the NX02-0017 Study since November 2013, they had still not released them.

And, as subsequent events proved, and contrary to generally accepted industry practice,

defendants had no intention of releasing the Top-line results from the NX-02-0018 Study in Q2

48


2014 “expeditiously.” Rather, defendants would continue their efforts to manipulate the results

of both the NX02-0017 Study and the NX02-0018 Study in an effort to achieve statistical

significance before releasing either of the Top-line results. Defendants offered no explanation

for why they continued to stall and delay releasing the Top-line results from each of the two

Phase 3 Studies, even though that delay violated generally accepted industry practice. Indeed, to

date, defendants have never released the full results of either Phase 3 Study.


Completion of Second Pivotal Phase 3 NX-1207 Trial for BPH.” The News Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) announced today that the last enrolled patient has completed participation in the Company’s pivotal Phase 3 clinical trial, NX02-0018. The NX02-0018 trial is the second of two pivotal prospective double blind placebo-controlled U.S. clinical trials being conducted to evaluate NX-1207 2.5 mg for the treatment of benign prostatic hyperplasia (BPH), a common affliction of older men. The first pivotal Phase 3 trial of NX-1207 for BPH, NX02-0017, has already completed patient participation. Both trials will be unblinded once data verification and auditing activities have been completed.

NX-1207 is a novel patented drug developed by Nymox for the treatment of BPH and localized prostate cancer. The drug is administered by a urologist in an office setting directly into the zone of the prostate to be treated. The procedure takes only a few minutes, does not require sedation, anesthesia or catheterization, and involves little or no pain or discomfort.

NX-1207 had previously successfully completed a series of blinded controlled multi-center U.S. clinical trials for BPH where a single 2.5 mg dose of NX-1207 was found to produce at 90 days an average improvement in standardized symptom score about double that reported for currently approved BPH drugs without causing the sexual or cardiovascular side effects associated with those drugs. Follow-up studies showed evidence of long lasting benefit with a significant proportion of men who received a single dose reporting maintained improvement in BPH symptoms without other treatments for up to 5 years or more.

The Company recently announced top line results of its two dose (2.5 mg or 15 mg) blinded prospective controlled Phase 2 study of NX-1207 for the treatment of localized low-risk prostate cancer, NX03-0040. Results indicated an overall benefit in terms of reduced cancer progression in patients treated with a single

49


injection of NX-1207 into the area of the prostate where cancer was found as compared to active surveillance (no treatment) controls. Follow-up analysis after up to 22 months found that for patients with upgraded biopsies in the treated area, those treated with NX-1207 required 85% less radiation and surgery treatments compared to controls. Consistent with earlier clinical trial experience with NX-1207, there were no significant safety issues or side effects associated with either the high dose (15 mg) or low dose (2.5 mg) of the drug in this study.

74. On June 11, 2014, defendants issued a News Release titled “Nymox Reports

Positive New Safety Study Data For Phase 3 BPH Drug.” The News Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) is pleased to announce new clinical data supporting the positive safety profile of NX-1207, the Company's lead compound in late Phase 3 testing for prostate enlargement (BPH or benign prostate hyperplasia). Recent pharmacokinetic studies using a newly developed highly sensitive blood test for NX-1207 have shown that the drug is undetectable in the blood postinjection, providing strong evidence that the drug, once injected into the prostate, remains confined to the prostate and thus unable to affect other organs such as the liver, kidneys, heart, or testes. These results are consistent with the pharmacological profile of the drug and with the extensive body of safety data from the more than 1,000 men treated with the drug to date demonstrating the absence of any significant drug-related side effects.

In addition, men treated with NX-1207 have not displayed any signs of an allergic or other immune reaction to the drug either on first injection or repeat injection. Extensive clinical immunogenicity testing of men in the Company’s pivotal Phase 3 trials (NX02-0017 and NX02-0018) and Phase 3 repeat injection safety studies (NX02-0020 and NX02-0022) have found no evidence of anti-drug antibody formation after exposure to the drug. The Company will present more detailed scientific data from these studies at upcoming medical conferences.

Currently approved drugs for BPH can produce significant sexual side effects such as impotence, decreased libido, ejaculation disorders, and male breast enlargement. In the clinical trials to date, NX-1207 has not shown to produce these sexual effects. Some approved BPH drugs, including combination drug therapies, are also associated with an increased risk of high-grade prostate cancer. By contrast, the area of the prostate targeted with NX-1207 treatment showed less prostate cancer progression with less radiation and surgery due to cancer progression as compared to controls in the recent NX03-0040 Phase 2 localized prostate cancer trial.

Nymox recently announced the completion of its second pivotal Phase 3 trial of NX-1207 for BPH, NX02-0018, and top-line results for its Phase 2 trial of NX-1207 for localized low risk prostate cancer, NX03-0040.

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NX-1207 is a novel patented drug developed by Nymox that is administered by a urologist in an office setting directly into the zone of the prostate to be treated. The procedure takes only a few minutes, does not require sedation, anesthesia or catheterization, and involves little or no pain or discomfort.

NX-1207 successfully completed a series of blinded controlled multi-center U.S. clinical trials for BPH where a single 2.5 mg dose of NX-1207 was found to produce at 90 days an average improvement in standardized symptom score about double that reported for currently approved BPH drugs without causing the sexual or cardiovascular side effects associated with those drugs. Follow-up studies showed evidence of long lasting benefit with a significant proportion of men who received a single dose reporting maintained improvement in BPH symptoms without other treatments for up to 5 years or more.

75. Defendants’ statements were materially false and misleading and continued to

obfuscate the material facts that the data from the NX02-0017 Study had been available to

defendants beginning in November 2013 and contrary to generally accepted industry practice

they failed to report the adverse material fact that the drug was not efficacious. Although

defendants state that they released the Top-line results of a Phase 2 Study of NX-1207, they do

explain why they have not released the materially adverse Top-line results from phase 3,

NX00017. It is clearly misleading to report on the favorable top-line results from the Phase 2

Study and fail to report the adverse Top-line results from the NX02-0017 Phase 3 Study. Under

generally accepted industry standards and practice, defendants also would have known of the

adverse Top-line results from the NX02-0018 Phase 3 Study, and by failing to report on them,

defendants further mislead the market. Defendants’ continued statements concerning the

efficacy of NX-1207 were misleading in light of the fact that the drug had failed in both Phase 3

Studies.

76. On July 22, 2014, defendants issued a News Release titled “Nymox Announces

Positive Efficacy Results in Phase 3 Repeat Injection Trial of NX-1207 for BPH.” The News

Release stated:

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Nymox Pharmaceutical Corporation (NASDAQ: NYMX) is pleased to announce new positive efficacy data for U.S. Study NX02-0022, the Company’s repeat injection study of NX-1207 for BPH. Analysis of symptomatic improvement from repeat injection over a 1 to 2 year period showed a mean improvement of 8.2 points (p<.001) in the AUA BPH Symptom Index Score. Evaluation of safety data from this study confirmed that NX-1207 reinjection treatment was well-tolerated by patients, did not impair sexual function, and has not shown any drug-related significant side effects. Participants in the clinical trial consisted of 160 consecutively treated men who had previously completed participation in an NX-1207 trial for BPH (the Phase 2 U.S. NX02-0014 or NX02-0016 trials or the U.S. Phase 3 NX02-0017 or NX02-0018 trials) and who volunteered for a subsequent open label injection of NX-1207.

The NX02-0022 study is the second prospective clinical safety and efficacy evaluation of re-injection of the Company’s NX-1207 drug for prostate enlargement (benign prostatic hyperplasia or BPH). The mean duration in this study from the initial enrollment prior to the first injection, to the assessment in the NX02-0022 trial was 23.5 months. Symptomatic improvement was assessed at 30 days after the open label reinjection of NX-1207 2.5 mg in the NX02-0022 study. The mean symptomatic improvement of 8.2 points is in a similar range to the mean improvement of 7.6 points (p<.001) earlier reported for the first NX-1207 reinjection trial NX02-0020. It is also in the range of the completed NX02- 0016 NX-1207 study where the mean improvement after 6 months was 7.5 points. These values are considerably higher than typically reported for the currently approved BPH medications (3 to 5 points) the latter which need to be taken on a daily basis indefinitely.

Further analysis of this data will be conducted following longer follow-up and also following the unblinding of the NX02-0017 and NX02-0018 trials. Results from the 3 month and 6 month time points post second injection for Study NX02- 0022 will be reported separately when available.

NX-1207 is a novel drug developed by Nymox for the treatment of BPH and localized prostate cancer. The drug is administered transrectally in a simple routine office injection that takes only a few minutes, does not require sedation, anesthesia or catheterization, and involves little or no pain or discomfort.

NX-1207 previously successfully completed a series of blinded controlled multi-center U.S. clinical trials for BPH where a single 2.5 mg dose of NX-1207 was found to produce at 90 days an average improvement in the standardized symptom score much higher than that reported for currently approved BPH drugs without causing the sexual or cardiovascular side effects associated with those drugs. Follow-up studies showed evidence of long lasting benefit with many men who received a single dose reporting maintained improvement in BPH symptoms without other treatments for up to 5 years or more.

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77. Defendants’ statements were materially false and misleading and continued to

obfuscate the material facts that the data from the NX02-0017 Study and the NX02-0018 Study

was, under generally accepted industry standards and practice, long available to defendants and

their failure to report the adverse Top-line results from each Phase 3 Study continued to mislead

the market. Defendants’ continued hyping of the efficacy of NX-1207 based on earlier Phase 2

Studies and follow-up studies intentionally misled the market in light of the failure of the drug in

the two long-completed Phase 3 Studies. Defendants continued to delay and stall releasing the

adverse results from the NX02-0017 Study and the NX02-0018 Study without explanation and in

violation of generally accepted industry standards and practice. To date, defendants have still

not released the full results of the two Phase 3 Studies.

78. In a complete surprise to the market, on Sunday November 2, 2014, defendants

issued a News Release titled “Nymox NX-1207 BPH Pivotal Phase 3 U.S. Studies NX02-0017

and NX02- 0018 Fail to Meet Primary Efficacy Endpoints.” The News Release stated:

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) announced today that the Company’s two Phase 3 U.S. studies of NX-1207 for the treatment of BPH, NX02- 0017 and NX02-0018, failed to meet their primary efficacy endpoints. Full results will be reported at a later date. The Company will hold a teleconference for shareholders on Monday, November 3, 2014 at 4:30 pm Eastern Time. The phone number to call for the teleconference is 1-866-436-9172 for U.S. and 1- 630-691-2760 for Canada and International. The confirmation number: 38420531.

Nymox CEO, Paul Averback, said, “The two studies failed to meet the pre-specified efficacy endpoints. Drug safety was acceptable. Drug efficacy reached levels similar to earlier studies but was not statistically significant in comparison to the placebo control due to a higher placebo response than in earlier NX-1207 studies and in other placebo-controlled BPH studies. The compound remains promising for low grade localized prostate cancer where the Phase 2 results showed evidence that NX-1207 treatment had a positive effect on biopsy results and clinical and biochemical progression.”

79. On November 3, after the close of the market, defendants held a conference call.

On that call, defendant Averback provided the reasons for the drug’s failure to achieve statistical

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significance in both of the Phase 3 Studies. The factual reasons he gave for the drug’s failure

were all facts known to defendant Averback and NYMOX at the beginning of, and throughout

the Class Period. However, defendants intentionally chose to omit and misrepresent these

material facts throughout the Class Period, as alleged herein. On the conference call, defendants

made the admissions of material fact set forth in paragraph 9 and below.

DEFENDANTS FAILED TO DISCLOSE MATERIAL ADVERSE INFORMATION

80. The statements made by defendants, as alleged in paragraphs 29, 31, 34, 36, 38,

40, 42, 44, 46, 48, 49, 51, 53, 55, 57, 59, 61, 63, 65, 66, 68, 70, 71, 73, 74, 76 above, were

materially false and misleading when made, as defendants knew when they made the statements,

because defendants failed to disclose and misrepresented the material facts alleged above in

paragraph 9 and the following additional material facts when making the statements they did

make as alleged above:

a. that Phase 3 trial results were not tangible or objective, but very subjective based on how an enrollee feels and responds to questionnaires (in prostate cancer, endpoint are laboratory biopsies, psas) and that NYMOX was not measuring shrinkage of prostate or urinary flow or force but enrollees saying I’m better;

b. that this procedure involving an injectable has more of a placebo effect than just a pill;

c. that the restrictive parameters presented in Phase 3 were difficult to achieve, as noted by defendant Averback in the November 3 conference call: “to enroll 1,000 people in the U.S. and to tell them they will be receiving an injection of saline and they are going to be followed for a year, its amazingly high mountain to climb to get people in the study”;

d. that the placebo effect is a well-known risk and the history of drug research has many examples of drugs that have gotten to Phase 3 and had failures due to the placebo effect; and

e. that as noted by defendant Averback in the November 3 conference call, “our eyes were wide open, we did a prespecified trial and we knew that this was what one was up against;” “it is very hard to be perfectly

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scientific about this, people, if you ask them questions they will give you accurate answers but not everyone is like that and some people are amenable to suggestibility and to social pressures and to stressors or anxieties that can either turn them to go one way or the other.”

81. Defendants’ statements and omissions, as alleged herein, failed to disclose the

material adverse facts alleged herein that raised serious questions as to the ability to achieve

statistically significant results for the NX-1207 in Phase 3 trials in light of difficulty of enrolling

candidates, obtaining objective and measured results, and the placebo effect. As detailed herein,

during the Class Period, defendants knew or were reckless in not disclosing the material negative

facts concerning the Phase 3 trials of NX-1207 as alleged herein.

82. The facts which defendants failed to disclose and misrepresented were material

because they severely impacted the likelihood of FDA approval of NYMOX’s NX-1207 for

BPH.

LOSS CAUSATION/ECONOMIC LOSS

83. During the Class Period, as detailed herein, defendants engaged in a scheme to

deceive the market and a course of conduct that artificially inflated the price of NYMOX

common stock and operated as a fraud or deceit on Class Period purchasers of NYMOX

common stock by failing to disclose the material adverse facts alleged herein that raised serious

questions as to the ability to achieve statistically significant results for the NX- 1207 in light of

difficulty of enrolling candidates, obtaining objective and measured results and the placebo

effect. When defendants’ prior misrepresentations, omissions and fraudulent conduct were

disclosed and became apparent to the market, the price of NYMOX common stock fell. As a

result of their purchases of NYMOX common stock during the Class Period, Lead Plaintiffs and

the other class members suffered economic loss, i.e. , damages, under the federal securities laws.

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84. By failing to disclose the adverse facts and misrepresenting the material adverse

facts alleged herein that raised serious questions as to the ability to achieve statistically

significant results for the NX-1207 in light of difficulty of enrolling candidates, obtaining

objective and measured results and the placebo effect, Defendants’ false and misleading

statements had the intended effect of causing and did in fact cause NYMOX common stock to

trade at artificially inflated levels throughout the Class Period.

85. As a direct and proximate result of the disclosures on November 2 and 3, 2014,

alleged above, the price of NYMOX common stock fell precipitously, declining an aggregate

82%, to close at $.93 per share on November 3, 2014.

86. These declines removed the artificial inflation from the price of NYMOX

common stock, causing real economic loss to investors who purchased NYMOX common stock

during the Class Period.

87. The 82% decline in the price of NYMOX common stock after these

misrepresentations and omissions came to light was a direct result of defendants’ fraud finally

being revealed to investors and the market. Moreover, the timing and magnitude of the price

decline in NYMOX common stock negates any inference that the loss suffered by Lead Plaintiffs

and the other class members was caused by changed market conditions, macroeconomic or

industry factors or Company-specific facts unrelated to defendants’ fraudulent conduct. The

economic loss, i.e. , damages, suffered by plaintiff and the other class members was a direct result

of defendants’ fraudulent scheme to artificially inflate the price of NYMOX common stock and

of the subsequent decline in the value of NYMOX common stock when defendants’ prior

misrepresentations and other fraudulent conduct were revealed.

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APPLICABILITY OF PRESUMPTION OF RELIANCE: FRAUD-ON-THE-MARKET DOCTRINE

88. At all relevant times, the market for NYMOX common stock was an efficient

market for the following reasons, among others:

• NYMOX common stock met the requirements for listing, and was listed and actively traded on the NASDAQ, a highly efficient and automated market;

• As a regulated issuer, NYMOX filed periodic public reports with the SEC;

• NYMOX regularly communicated with public investors via established market communication mechanisms, including regular dissemination of press releases on the national circuits of major newswire services and other wide-ranging public disclosures, such as communications with the financial press, securities analysts and other similar reporting services; and

• NYMOX was followed by securities analysts employed by major brokerage firms, banks and investment houses.

89. As a result, the market for NYMOX common stock promptly digested current

information regarding NYMOX from all publicly available sources and reflected such

information in NYMOX’s common stock price. Under these circumstances, all purchasers of

NYMOX common stock during the Class Period are entitled to a presumption of reliance.

Further, Lead Plaintiffs are entitled to, and will rely on, the presumption of reliance doctrine

based on the material omissions alleged herein.

90. The market for NYMOX common stock was open, well-developed and efficient

at all relevant times. As a result of the materially false and misleading statements and failures to

disclose alleged herein, NYMOX common stock traded at artificially inflated prices during the

Class Period. Lead Plaintiffs and other members of the class purchased or otherwise acquired

NYMOX common stock relying upon the integrity of the market price of NYMOX common

stock and market information relating to NYMOX, and have been damaged thereby.

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91. During the Class Period, defendants materially misled the investing public,

thereby inflating the price of NYMOX common stock, by publicly issuing false and misleading

statements and omitting to disclose material facts necessary to make defendants’ statements, as

alleged herein, not false and misleading. Said statements and omissions were materially false

and misleading in that they failed to disclose material adverse information and misrepresented

the truth about the Company, its business and operations, as alleged herein.

92. At all relevant times, the material misrepresentations and omissions particularized

in this Complaint directly and proximately caused, or were a substantial contributing cause of,

the damages sustained by Lead Plaintiffs and other members of the class. During the Class

Period, defendants made or caused to be made a series of materially false or misleading

statements and omitted material facts. These material misstatements and omissions had the

effect of creating in the market an unrealistically positive assessment of NX-1207 for BPH and

NYMOX’s business, prospects and operations, causing the Company’s common stock to be

overvalued and artificially inflated at all relevant times. Defendants’ materially false and

misleading statements during the Class Period resulted in Lead Plaintiffs and other members of

the class purchasing the Company’s common stock at artificially inflated prices, and, thus,

causing the damages complained of herein.

CLASS ACTION ALLEGATIONS

93. Lead Plaintiffs bring this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons who purchased or

acquired the common stock of NYMOX during the Class Period and who were damaged thereby

(the “Class”). Excluded from the Class are defendants and their families, the officers and

directors of the Company and its subsidiaries and affiliates, at all relevant times, members of

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their immediate families and their legal representatives, heirs, successors or assigns and any

entity in which defendants have or had a controlling interest.

94. The members of the Class are so numerous that joinder of all members is

impracticable. While the exact number of Class members is unknown to Lead Plaintiffs at this

time and can only be ascertained through appropriate discovery, Lead Plaintiffs believe that there

are thousands of members in the proposed Class. As of March 14, 2014, total shares outstanding

were 34,865,673, there were 168 holders of record of the common shares and 5,571 beneficial

shareholders in total. Of these, 57 were holders of record of the common shares and 4,568 were

beneficial shareholders with addresses in the United States and such holders owned an aggregate

of 20,211,305 shares, representing approximately 57.97% of the outstanding shares of common

stock. Record owners and other members of the Class may be identified from records maintained

by NYMOX or its transfer agent and may be notified of the pendency of this action by mail,

using the form of notice similar to that customarily used in securities class actions.

95. Lead Plaintiffs’ claims are typical of the claims of the members of the Class as all

members of the Class are similarly affected by defendants’ wrongful conduct in violation of

federal law that is complained of herein.

96. Lead Plaintiffs will fairly and adequately protect the interests of the members of

the Class and have retained counsel competent and experienced in class and securities litigation.

97. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

a. Whether the federal securities laws were violated by defendants’ acts as alleged herein;

b. Whether statements made by defendants to the investing public during the Class Period misrepresented and/or omitted material facts about NX-1207;

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and

c. The extent to which members of the Class have sustained damages and the proper measure of damages.

98. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as

the damages suffered by individual Class members may be relatively small, the expense and

burden of individual litigation make it impossible for members of the Class to individually

redress the wrongs done to them. There will be no difficulty in the management of this action as

a class action.

COUNT I

FOR VIOLATION OF §10(b) OF THE EXCHANGE ACT AND RULE 10b-5 AGAINST ALL DEFENDANTS

99. Lead Plaintiffs repeat and reallege each and every allegation contained above as if

fully set forth herein.

100. During the Class Period, defendants carried out a plan, scheme and course of

conduct which was intended to and, throughout the Class Period, did: (a) deceive the investing

public, including Lead Plaintiffs and other Class members, as alleged herein; (b) artificially

inflate and maintain the market price of NYMOX common stock; and (c) cause Lead Plaintiffs

and other members of the Class to purchase NYMOX common stock at inflated prices. In

furtherance of this unlawful scheme, plan and course of conduct, defendants took the actions set

forth herein.

101. Defendants: (a) employed devices, schemes and artifices to defraud; (b) made

untrue statements of material fact and/or omitted to state material facts necessary to make the

statements made not misleading; and (c) engaged in acts, practices and a course of business

which operated as a fraud and deceit upon the purchasers of the Company’s common stock in an

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effort to maintain artificially high market prices for such stock in violation of §10(b) of the

Exchange Act and Rule 10b-5. In addition to the duties of full disclosure imposed on defendants

as a result of their making of affirmative statements and reports, or their participation in the

making of affirmative statements and reports to the investing public, defendants had a duty to

promptly disseminate truthful information that would be material to investors as required by the

integrated disclosure provisions of the SEC, including accurate and truthful information with

respect to the Company’s operations so that the market price of the Company’s common stock

would be based on truthful, complete and accurate information.

102. Defendants, individually and in concert, directly and indirectly, by the use, means

or instrumentalities of interstate commerce and/or the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about the business and

future prospects of NYMOX as alleged herein. Defendants employed devices, schemes and

artifices to defraud, while in possession of material adverse non-public information and engaged

in acts, practices and a course of conduct as alleged herein in an effort to assure investors of

NYMOX’s value and performance and continued substantial growth, which included the making

of, or the participation in the making of, untrue statements of material facts and omitting to state

material facts necessary in order to make the statements made about NYMOX and its business

operations and future prospects, in the light of the circumstances under which they were made,

not misleading, as set forth more particularly herein, and engaged in transactions, practices and a

course of business which operated as a fraud and deceit upon purchasers of NYMOX common

stock during the Class Period.

103. Defendants had actual knowledge of the misrepresentations and omissions of

material facts set forth herein, or acted with reckless disregard for the truth in that they failed to

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ascertain and to disclose such facts, even though such facts were available to them. Such

material misrepresentations and/or omissions by defendants were done knowingly or recklessly

and for the purpose and effect of concealing the truth concerning the efficacy of NX-1207 for

BPH. As demonstrated by defendants’ misstatements alleged herein, defendants, if they did not

have actual knowledge of the misrepresentations and omissions alleged, were reckless in failing

to obtain such knowledge by deliberately refraining from taking the steps necessary to discover

whether those statements were false or misleading. It is acceptable best practice for a company

to perform an interim analysis between pivotal phase 3 studies. The 02-0017 Phase 3 trial was

completed in November 2013 and the 02-0018 Phase 3 trial was completed in May 2014, an

interim review could and should have been performed. Additionally, best practices also involve

a company promptly reviewing and analyzing completed study results. Despite defendants’

repeated assurance of expeditiously analyzing and disclosing the completed study results,

defendants did not make such disclosures. However, at this same interim time, the Company

entered into a Common Stock Private Purchase Agreement which provided for the purchase of

up to $15 million of NYMOX’s common stock over a twenty-four month period, so long as no

material adverse event were to occur.

104. As a result of the dissemination of the materially false and misleading information

and failure to disclose material facts, as set forth above, the market price of NYMOX common

stock was artificially inflated during the Class Period. In ignorance of the fact that the market

price of NYMOX common stock was artificially inflated, and relying directly or indirectly on the

false and misleading statements made by defendants, or upon the integrity of the market in which

the securities trade, and/or on the absence of material adverse information that was known to or

recklessly disregarded by defendants but not disclosed in public statements by defendants during

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the Class Period, Lead Plaintiffs and the other members of the Class acquired NYMOX common

stock during the Class Period at artificially high prices and were damaged thereby.

105. At the time of said misrepresentations, Lead Plaintiffs and other members of the

Class were ignorant of their falsity and believed them to be true. Had Lead Plaintiffs, other

members of the Class and the marketplace known of the true facts as alleged herein, which were

not disclosed or were misrepresented by defendants, Lead Plaintiffs and other members of the

Class would not have purchased or otherwise acquired their NYMOX common stock during the

Class Period, or, if they had acquired such securities during the Class Period, they would not

have done so at the artificially inflated prices which they paid.

106. By virtue of the foregoing, defendants violated §10(b) of the Exchange Act and

Rule 10b-5 promulgated thereunder.

107. As a direct and proximate result of defendants’ wrongful conduct, Lead Plaintiffs

and the other members of the Class suffered damages in connection with their purchases of the

Company’s common stock during the Class Period.

COUNT II

FOR VIOLATION OF §20(A) OF THE EXCHANGE ACT AGAINST ALL DEFENDANTS

108. Lead Plaintiffs repeat and reallege each and every allegation contained above as if

fully set forth herein.

109. Defendant Averback acted as a controlling person of NYMOX within the

meaning of §20(a) of the Exchange Act as alleged herein. By virtue of his high-level position

and awareness of the true facts alleged herein, he had the power to influence and control and did

influence and control, directly or indirectly, the decision-making of the Company, including the

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content and dissemination of the various statements which Lead Plaintiffs allege are false and

misleading. The Company controlled him and all of its other employees.

110. As alleged above, defendant Averback violated §10(b) and Rule 10b-5 by the acts

and omissions as alleged in this Complaint. By virtue of his position as a controlling person of

NYMOX, he is liable pursuant to §20(a) of the Exchange Act. As a direct and proximate result

of his wrongful conduct, Lead Plaintiffs and other members of the Class suffered damages in

connection with their purchases of the Company’s common stock during the Class Period.

PRAYER FOR RELIEF

WHEREFORE, Lead Plaintiffs pray for relief and judgment, as follows:

A. Determining that this action is a proper class action and certifying Lead Plaintiffs

as class representatives under Rule 23 of the Federal Rules of Civil Procedure;

B. Awarding compensatory damages in favor of Lead Plaintiffs and the other Class

members against all defendants, jointly and severally, for all damages sustained as a result of

defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon;

C. Awarding Lead Plaintiffs and the Class their reasonable costs and expenses

incurred in this action, including counsel fees and expert fees; and

D. Granting such other and further relief as the Court may deem just and proper .

JURY DEMAND

Lead Plaintiffs hereby demand a trial by jury.

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DATED: June 9, 2015 CARELLA, BYRNE, CECCHI, OLSTEIN, BRODY & AGNELLO, P.C. Counsel for Lead Plaintiffs and Liaison Counsel for the Class

By: /s/ James E. Cecchi JAMES E. CECCHI

5 Becker Farm Road Roseland, New Jersey 07068 (973) 994-1700

Charles J. Piven Yelena Trepetin BROWER PIVEN

A Professional Corporation 1925 Old Valley Road Stevenson, MD 21153 (410) 332-0030

David A.P. Brower BROWER PIVEN

A Professional Corporation 475 Park Avenue South, 33 rd Floor New York, NY 10016 (212) 501-9000

Counsel for Lead Plaintiffs and Lead Counsel for the Class

Deborah R. Gross LAW OFFICES BERNARD M. GROSS, P.C. The Wanamaker Building, Suite 450 100 Penn Square East Philadelphia, PA 19107 (215) 561-3600

Additional Counsel

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Roy Sapir, et al. v. Nymox Pharmaceutical Corporation, et al. 14-CV …securities.stanford.edu/.../201569_r01c_14CV07331.pdf · 2016-04-05 · Case 2:14-cv-07331-JLL-JAD Document

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