XML 24 R13.htm IDEA: XBRL DOCUMENT v3.5.0.2
Subsequent Events
6 Months Ended
Jun. 30, 2016
Subsequent Events [Abstract]  
Subsequent Events

8. Subsequent Events

On July 26, 2016, the Company announced its plan to discontinue the ARMOR3-SV clinical trial following the recommendation made by the trial’s independent data monitoring committee (“DMC”) on July 25, 2016. Based on a review of all available safety and efficacy data, the DMC determined that the ARMOR3-SV trial would likely not succeed in meeting its primary endpoint of demonstrating an improvement in radiographic progression-free survival for galeterone versus enzalutamide in men with AR-V7 positive metastatic CRPC. In making its recommendation, the DMC did not cite any safety concerns with galeterone in the trial. The Company plans to analyze the totality of the unblinded study data in detail to evaluate potential paths forward for galeterone and the Company’s pipeline. Based on preliminary data reviewed to date, however, there is a substantial likelihood the the Company will not persue the development of galeterone in AR-V7 positive CRPC in the future.

The Company also intends to evaluate its ongoing ARMOR2 expansion in mCRPC patients with acquired resistance to enzalutamide, and its planned study in patients who rapidly progress on either enzalutamide or abiraterone acetate. The Company will allow all patients currently enrolled in the ARMOR2 and ARMOR3-SV trials to continue on therapy following consultation with their physicians and study investigators.

On July 29, 2016, in connection with the discontinuation of ARMOR3-SV, the Company announced plans to reduce its workforce by approximately 60% and expects to incur a charge of approximately $1,300 related to severance, benefits and related costs, substantially all of which will be recorded in the third quarter of 2016.

On August 1, 2016, a purported stockholder of the Company filed a putative class action lawsuit in the U.S. District Court for the Southern District of New York against the Company, Jodie P. Morrison and Lee H. Kalowski, entitled Vaibhav Doshi v. Tokai Pharmaceuticals, Inc., Jodie Pope Morrison and Lee H. Kalowski, No. 1:16-cv-06106. The lawsuit alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder by making allegedly false and misleading statements and omissions about the Company’s clinical trials for its drug candidate, galeterone. The lawsuit seeks, among other things, unspecified compensatory damages in connection with the Company’s allegedly inflated stock price between June 24, 2015 and July 25, 2016 as a result of those allegedly false and misleading statements, as well as interest, attorneys’ fees and costs. The Company believes it has valid defenses, and intends to engage in a vigorous defense of the litigation. However, the Company is unable to predict the ultimate outcome of this action, and, therefore cannot estimate possible losses or ranges of losses, if any, or the materiality thereof. An unexpected unfavorable resolution of this matter in any reporting period may have a material adverse effect on the Company's results of operations and cash flows for that period.