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1 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 2 DENNIS J. HERMAN (220163) MONIQUE C. WINKLER (213031) 3 100 Pine Street, Suite 2600 San Francisco, CA 94111 4 Telephone : 415/288-4545 415/288-4534 (fax) 5 [email protected] [email protected] 6 Liaison Counsel 7 SCHATZ NOBEL IZARD, P.C. BERGER & MONTAGUE, P.C. ANDREW M. SCHATZ 8 SHERRIE R. SAVETT JEFFREY S. NOBEL CAROLE A. BRODERICK NANCY A. KULESA 9 BARBARA A. PODELL One Corporate Center PHYLLIS M. PARKER 20 Church Street, Suite 1700 10 JOSHUA C. SCHUMACHER Hartford, CT 06103 1622 Locust Street Telephone: 860/493-6292 11 Philadelphia, PA 19103 860/493-6290 (fax) Telephone : 215/875-3000 [email protected] 12 215/875-4604 (fax) [email protected] [email protected] [email protected] 13 [email protected] [email protected] 14 Co-Lead Counsel for Plaintiffs 15 UNITED STATES DISTRICT COURT 16 NORTHERN DISTRICT OF CALIFORNIA 17
18 In re NUVELO, INC. SECURITIES ) Master File No. 3:07-cv-04056-MMJ LITIGATION ) 19 CLASS ACTION
20 This Document Relates To: ) CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FEDERAL 21 ALL ACTIONS. ) SECURITIES LAWS
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28 3:07-cv-04056-VRW Document 31 Filed 11/09/2007 Page 2 of 79
1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION ...... 1
4 II. JURISDICTION AND VENUE ...... 5
5 III. PARTIES ...... 5
6 IV. CONFIDENTIAL WITNESSES ...... 7
7 V. BACKGROUND TO THE CLASS PERIOD ...... 8
8 A. Nuvelo Bets Its Future on the Commercialization of Alfimeprase ...... 9
9 B. Amgen Refuses to Fund Further Efforts to Commercialize Alfimeprase ...... 10
10 VI. CLINICAL TRIALS OF ALFIMEPRASE ...... 12
11 1. PAO Clinical Program ...... 14
12 a. Phase 2 Study ...... 15
13 b. Phase 3 Studies ...... 16
14 2. CO Clinical Program...... 17
15 a. Phase 2 Study ...... 17
16 b. Phase 3 Studies ...... 18
17 3. Nuvelo Announces Failure of Both PAO and CO Phase 3 Trials ...... 19
18 VII. DEFENDANTS' SCHEME TO DEFRAUD ...... 23
19 A. Defendants Falsely Represented the Significance and Reliability of the Phase 2 Alfimeprase Trial Data, and Conceal Material Risks to FDA 20 Approval and Commercial Marketability for PAO and CO...... 23
21 B. Defendants ' Scheme Unravels ...... 29
22 VIII. FALSE AND MISLEADING STATEMENTS DURING THE CLASS PERIOD...... 31
23 A. Defendants' January 5, 2006 False and Misleading Statements ...... 31
24 1. Reasons Why Defendants' January 5, 2006 Statements Were False and Misleading ...... 32 25 2. Scienter ...... 34 26 B. Defendants ' February 27, 2006 False and Misleading Statements ...... 36 27 1. Reasons Why Defendants' February 27, 2006 Statements Were 28 False and Misleading ...... 38 3:07-cv-04056-VRW Document 31 Filed 11/09/2007 Page 3 of 79
1 2. Scienter ...... 39
2 C. Misleading Statements in Nuvelo's FY05 Report on Form 10-K ...... 41
3 1. Reasons Why the Statements in the FY05 Report on Form 10-K Were Materially False and Misleading to Investors ...... 42 4 2. Scienter ...... 44 5 D. Defendants' False and Misleading Statements in April 10, 2006 Press 6 Release ...... 46
7 1. Reasons Why Defendants' April 10, 2006 Statement Was False and Misleading ...... 46 8 2. Scienter ...... 47 9 E. Defendants' May 5, 2006 False and Misleading Statements ...... 49 10 1. Reasons Why Defendants' May 5, 2006 Statements Were False 11 and Misleading ...... 49
12 2. Scienter ...... 50
13 F. Defendants' August 3, 2006 False and Misleading Statements ...... 52
14 1. Reasons Why Statements Made on the August 3, 2006 Conference Call Were False and Misleading...... 53 15 2. Scienter ...... 54 16 IX. MISLEADING RISK WARNINGS PROVIDE NO SAFE HARBOR ...... 57 17 X. ADDITIONAL SCIENTER ALLEGATIONS ...... 61 18 A. Individual Defendants' Compensation Was Tied to Financial Performance...... 61 19 B. Defendants Were Motivated to Commit Fraud to Gain Access to Capital 20 through the Follow-On Offering ...... 62
21 XI. PRESUMPTION OF RELIANCE AND PROXIMATE LOSS CAUSATION/ECONOMIC LOSS ...... 64 22 A. Applicability of Presumption of Reliance: Fraud on the Market Doctrine...... 65 23 B. Defendants' False and Misleading Statements Proximately Caused 24 Economic Loss to Nuvelo's Investors ...... 66
25 XII. GROUP PLEADING ALLEGATIONS ...... 67
26 XIII. CLASS ACTION ALLEGATIONS ...... 69
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1 1. INTRODUCTION
2 1. This is a securities fraud class action against Nuvelo, Inc. ("Nuvelo or the
3 "Company ) and certain of the Company's senior officers and directors for violations of the
4 Securities Exchange Act of 1934 (the "Exchange Act ) and Rule 1 Ob-5 promulgated thereunder, 17
5 C.F.R. §240.10b-5. This action is brought on behalf of all purchasers of the publicly traded
6 securities ofNuvelo between January 5, 2006 and December 8, 2006, inclusive (the "Class Period ),
7 including purchasers in Nuvelo's January 31, 2006 $119 million follow-on offering ("Follow-On
8 Offering ).
9 2. Nuvelo is a biopharmaceutical company engaged in the development and
10 commercialization of acute cardiovascular and cancer therapies. During the Class Period, the
11 Company's drug development pipeline included three acute cardiovascular drugs under
12 development: alfimeprase, recombinant nematode anticoagulant protein c2 ("rNAPc2 ) and a
13 thrombin inhibiting aptamer. However, the Company's lead cardiovascular development program -
14 to which the market attributed 80% of the Company's value and which the Company touted as its
15 path to profitably - was alfimeprase, a direct-acting thrombolytic agent, or blood clot dissolver.
16 3. Nuvelo obtained the rights to alfimeprase from Amgen, Inc. ("Amgen ), a
17 pharmaceutical company whose co-founder, George Rathmann ("Rathmann ), sat on Nuvelo's
18 board. Amgen had previously tried unsuccessfully to develop alfimeprase. Nevertheless, Nuvelo,
19 which had never successfully brought a drug to market, sought to capitalize on alfimeprase's
20 purported commercial potential, using it as a lever to raise money to keep the Company afloat, as
21 well as to line defendants' pockets.
22 4. At the time Nuvelo obtained the rights to alfimeprase in 2002, it was running out of
23 cash and in danger ofbecoming insolvent. After obtaining the rights to alfimeprase, Nuvelo merged
24 with Variagenics, Inc. ("Variagenics ) - another drug company that, like Nuvelo, had no products
25 with any near term revenue potential in the pipeline but, unlike Nuvelo, had $55.9 million in the
26 bank. Following the merger, Nuvelo jumped into clinical trials of alfimeprase, repeatedly boasting
27 of the purported results of the trials and the potential commercial success of drug. Before and during
28 the Class Period, the Company repeatedly used the alleged success ofthe alfimeprase trials to access
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1 the market and obtain much needed cash to continue in operation, test its drug candidates and highly
2 compensate its executives, raising over $291 million in four public and private offerings, while
3 paying over $4.7 million in salary and cash bonuses to its top officers and directors, the defendants
4 here.
5 5. During the Class Period, Nuvelo conducted Phase 3 clinical trials for the use of
6 alfimeprase for the treatment of acute peripheral arterial occlusion ("PAO ) and catheter occlusion
7 ("CO ). Success of the Phase 3 trials was required to secure U.S. Food and Drug Administration
8 ("FDA ) approval and tap the commercial potential ofthe drug. Despite the fact they simply did not
9 have the clinical data to back up their statements, defendants repeatedly stated that alfimeprase had
10 already proved effective for the use for which it was being tested in clinical trials for the treatment of
11 PAO. Defendants further concealed a "target product profile necessary to commercialize the drug
12 for treatment of CO, as well as the fact that the FDA had imposed an extraordinary regulatory
13 standard, forty times more stringent than normal, for approval based on the Phase 3 CO trial.
14 6. Defendants' statements were based on the results ofPhase 2 trials completed prior to
15 the Class Period, which they claimed demonstrated the efficacy of the drug for the purposes for
16 which it was being tested in the Phase 3 trials. During the Class Period, defendants repeatedly touted
17 the Phase 2 results when discussing the likely success ofthe Phase 3 trials. Defendants claimed, for
18 example, that the Phase 2 trials had demonstrated that alfimeprase restored blood flow and allowed
19 patients to avoid open surgery when, in fact, defendants knew that the results of the Phase 2 trial in
20 PAO could have been the result ofthe catheter used to inject the drug being pushed through the clot,
21 and there was no way to reliably determine how much, if any, of the positive results were due to
22 alfimeprase. Incredibly, despite their knowledge of these adverse facts, defendants told investors
23 that the Phase 3 trials represented a "low risk path to regulatory approval that would be "rapid to
24 market.
25 7. In making these statements, defendants misrepresented the significance ofthe Phase 2
26 results, and failed to accurately or fully disclose the risks associated with the ongoing clinical trials.
27 Nuvelo's periodic filings with the Securities and Exchange Commission ("SEC ) prior to and during
28 the Class Period similarly misrepresented the risks associated with the Phase 3 trials. The risk
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1 warnings included in those filings included standard boilerplate suggesting that success ofthe Phase
2 3 trials was not guaranteed. However, those warnings failed to specifically disclose known risks that
3 undermined the purported Phase 2 results. Taken together, these statements misled the investing
4 public about the significance of the Phase 2 trial results and the risks then presented in the Phase 3
5 trials.
6 8. In particular, Nuvelo and its officers failed to adequately warn investors that: (i) the
7 purportedly positive Phase 2 results could be the result of blood clots in certain patients with PAO
8 simply being broken up by the insertion of the catheter into the artery, rather than dissolved by the
9 action of the drug, a matter which had been discussed internally at Nuvelo even before the Phase 2
10 trials were completed; (ii) in the Phase 3 CO trial, the FDA had imposed a much more stringent p-
11 value requirement on Nuvelo to demonstrate success at a statistical significance level that wasforty
12 times more stringent than what the market believed; (iii) the market opportunity for the drug for
13 PAO was much smaller than represented to analysts and the market because ofcompetition from off-
14 label use of other drugs and mechanical clot-busting techniques, the potential impact of which was
15 not timely or accurately disclosed to investors; and (iv) Nuvelo had an undisclosed "target product
16 profile which would be necessary to meet in order for the Company to market alfimeprase for CO,
17 such that the Company would not proceed to market alfimeprase for that indication ifthe trial results
18 did not meet that profile, even ifthe drug was otherwise qualifiedfor FDA approval.
19 9. As a result of these false and misleading statements, Nuvelo's securities traded at
20 dramatically inflated prices during the Class Period. At the outset of the Class Period, Nuvelo
21 announced that it had secured a commitment from pharmaceutical giant Bayer Healthcare A.G.
22 ("Bayer ) to fund the Phase 3 trials of alfimeprase, which securities analysts and investors
23 reasonably understood as an endorsement of defendants' statements regarding the reliability of the
24 Phase 2 results, the ease with which efficacy would be demonstrated in the Phase 3 trials and the
25 market size for the drug. Nuvelo immediately took advantage ofthese inflated prices by selling over
26 7.5 million shares of common stock in the Follow-On Offering, realizing proceeds of $119 million.
27 10. On December 11, 2006, Nuvelo stunned investors by announcing that both of the
28 Phase 3 trials of alfimeprase had failed. The Company also revealed that the purportedly positive
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1 results in the Phase 2 PAO trial had simply been the result ofthe catheter used to deliver alfimeprase
2 being pushed through a blood clot and breaking up the clot, rather than any action of the drug itself.
3 In fact, this explanation for the positive Phase 2 results had been discussed repeatedly in
4 Company-wide meetings prior to the Class Period, creating internal concern among professional
5 employees at Nuvelo who disputed the potential of alfimeprase to deliver on the promises being
6 made by the Company. The Company further revealed that the Phase 3 CO trial had failed, both
7 because the FDA had imposed a much more stringent test of statistical significance than typically
8 required and because - even at standard levels of statistical significance - the drug had failed to meet
9 the Company's undisclosed product performance standards based on market size and competition,
10 thereby rendering it unmarketable. In fact, the Company said that although the CO trial had
11 produced statistically significant results when measured by traditional standards, and the Company
12 could probably obtain approval by doing another trial, the Company had no interest in doing so.
13 These internally known, but undisclosed, risks which had come to fruition were publicly revealed for
14 the first time when the reasons for the failure ofthe Phase 3 trials were announced, causing Nuvelo's
15 stock and options prices to instantly collapse, the stock falling from $19.55 to $4.05 per share and
16 the options becoming worthless. This one day loss of nearly 80% of Nuvelo's value injured
17 thousands of investors who had purchased Nuvelo's inflated stock and options in reliance on
18 defendants' misrepresentations about the Phase 2 results, the Phase 3 trials, and the efficacy and
19 marketability of alfimeprase.
20 11. Following the Class Period, further details emerged regarding the extent to which
21 defendants had deliberately hidden and misrepresented the risks associated with the Phase 3 trials.
22 On June 26, 2007, defendants revealed that the FDA-imposed standard for statistical significance in
23 the CO trial required alfimeprase to establish a false positive rate of only 1 in 1,250 cases - a level
24 virtually unheard of in the industry and far more stringent than the typical rate applied by the FDA of
25 5 in 100. Plaintiffs have been unable to identify any other trial where the FDA had imposed such a
26 stringent standard. Defendants further revealed that alfimeprase had failed to meet the Company's
27 previously undisclosed internal marketing guidelines for the drug. These disclosures, along with the
28 news that Bayer had pulled out of any further efforts to develop the drug, caused an additional 20%
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1 drop in Nuvelo's share price, causing additional injury to Class members who continued to hold their
2 shares through the date of these announcements.
3 II. JURISDICTION AND VENUE
4 12. The claims asserted herein arise under §§10(b) and 20(a) of the Exchange Act and
5 Rule 1 Ob-5 promulgated thereunder. Jurisdiction is conferred by §27 ofthe Exchange Act. Venue is 6 proper pursuant to §27 of the Exchange Act as defendant Nuvelo/or the individual defendants 7 conducted business in and the wrongful conduct took place in this District. 8 III. PARTIES 9 13. Plaintiff Juan Pablo Cabrera purchased Nuvelo securities during the Class Period as 10 described in the Certification attached hereto as Exhibit A and was damaged as a result of 11
12 defendants' false and misleading statements.
13 14. Plaintiffs Frank C. Petronis and Patricia A. Petronis purchased Nuvelo securities
14 during the Class Period as described in the Certification attached hereto as Exhibit B and were 15 damaged as a result of defendants' false and misleading statements. 16 15. Plaintiffs Todd A. Stephens and Amy A. Stephens purchased Nuvelo securities as 17 described in the Certification attached hereto as Exhibit C and were damaged as a result of 18
19 defendants' false and misleading statements.
20 16. Defendant Nuvelo is a biopharmaceutical company focused on the discovery,
21 development and commercialization of drugs for acute cardiovascular and cancer therapy. The 22 Company was founded in 1992 as Hyseq, Inc. and renamed Hyseq Pharmaceuticals, Inc. ("Hyseq ) 23 in 2001. Upon the completion of a merger between Hyseq and Variagenics in February 2003, the 24 Company was renamed Nuvelo.1 Nuvelo is a Delaware corporation with its principal place of 25
26 1 For ease ofreference, the Company is referred to herein as "Nuvelo, regardless ofthe name 27 it was operating under at the time the matters alleged took place. 28
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1 business at 201 Industrial Road, Suite 310, San Carlos, CA 94070-6211. The Company's common
2 stock trades on the National Association of Securities Dealers Automated Quotations ("NASDAQ )
3 under the ticker symbol NUVO and its options trade on five options exchanges, the American Stock 4 Exchange ("AMEX ), Chicago Board of Options Exchange ("CBOE ), Philadelphia Stock 5 Exchange ("PHLX ), International Stock Exchange ("ISE ) and Pacific Stock Exchange ("PSE ). 6 7 In its Report on Form 10-K for the year ending December 31, 2005, Nuvelo stated that "[a]s of
8 December 31, 2005, we had 103 full-time equivalent employees. Each ofthe individual defendants
9 was heavily involved in the day-to-day details ofmanaging the Company. As a result ofdefendants'
10 false statements, Nuvelo's stock traded at inflated levels during the Class Period, trading as high as 11 $20.71 per share in August 2006, and the Company was able to sell $119 million worth of Nuvelo 12 securities in the Follow-On Offering. 13 17. Defendant Ted W. Love ("Love ) is, and at all relevant times has been, Chief 14 Executive Officer ("CEO ) and Chairman of the Board of Nuvelo. Love joined the Company in 15 January 2001 and was appointed CEO in March 2001. According to CW 1 (infra, ¶22), "everything 16 went through Ted at Nuvelo, and as a result, Love was constantly kept apprised of information 17 concerning Nuvelo's drug candidates, including its main candidate, alfimeprase. Love has also 18 served as the Company's Chief Operating Officer. Love has served as a director of the Company 19 since February 2001 and became Chairman of the Board in September 2005. Love previously 20 worked at Theravance, Inc., where he served as Senior Vice President ("VP ) ofDevelopment from 21 February 1998 to January 2001. Love was employed for six years at Genentech Inc. ("Genentech ), 22 where he oversaw drugs in development including TNKase (Tenecteplase), a single-bolus 23 thrombolytic agent, used off-label as a treatment for PAO. Love signed Nuvelo's filings with the 24 SEC during the Class Period, including the Form 10-K for the fiscal year ending December 31, 2005 25 and the Forms 10-Q for the first three quarters of 2006. 26 18. Defendant Gary S. Titus ("Titus ) was, at relevant times, VP of Finance, Chief 27 Accounting Officer ("CAO ChiefFinancial Officer ("CFO ofNuvelo. Titus joined Nuvelo 28 ) and )
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1 in January 2003 as Senior Director ofFinance. In July 2004 he was promoted to VP of Finance and
2 CAO. From November 2005 to July 24, 2006 he served as acting CFO. Titus' employment with the 3 Company was terminated on September 1, 2006. Titus signed Nuvelo's filings with the SEC during 4 the Class Period, including the Form 10-K for the fiscal year ending December 31, 2005 and the 5 Form 10-Q for the first quarter of 2006. 6 19. Defendant Michael D. Levy ("Levy ) was at all relevant times, Nuvelo's Senior VP, 7
8 Research and Development. Levy oversaw all of Nuvelo's clinical programs, including for
9 alfimeprase, and regularly provided investors with information regarding those trials, including on
10 regular conference calls with analysts . Levy joined Nuvelo in November 2004. 11 20. Defendants Love, Titus, and Levy are collectively referred to herein as the 12 "Individual Defendants. According to Nuvelo's Proxy Statement, filed with the SEC on April 14, 13 2006, the Company only had four executive officers as of March 31, 2006, including Individual 14 Defendants Love, Levy and Titus. 15 IV. CONFIDENTIAL WITNESSES 16 21. The allegations of defendants' improper conduct alleged in this Consolidated 17 Complaint for Violations of Federal Securities Law ("Complaint ) are made upon information and 18 belief, based upon investigation of counsel, including a review of SEC filings issued by Nuvelo, 19
20 news articles, securities analyst reports, advisories about the Company, press releases and other
21 public statements issued by the Company or its representatives, media reports about the Company,
22 and the first-hand accounts of four confidential witnesses, including the following: 23 22. Confidential Witness No. 1 ("CW 1 ) was a director of research with Nuvelo during 24 the Phase 2 clinical trials of alfimeprase. Although CW 1 did not work directly on the alfimeprase 25 trials , he had regular contact with other employees who did. CW1 left Nuvelo in 2005 , around the 26 time the Phase 2 clinical trials were being completed, because s/he was convinced that neither 27
28 alfimeprase nor the drug candidates s/he was working on had potential for commercial success.
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1 CW1 said that, during his/her tenure, other Nuvelo employees had expressed similar doubts to
2 him/her about alfimeprase's potential, including VP ofResearch Walter Funk, who reported directly
3 to, and had frequent communications with, Love about alfimeprase and Nuvelo's other drug 4 candidates. 5 23. CW2 was a principal investigator for one of the Phase 3 clinical trials for PAO (i. e., 6 7 NAPA - see ¶46-49). As such, CW2 has direct personal knowledge ofthe protocols for and conduct
8 of those trials.
9 24. CW3 was employed by Nuvelo in clinical operations during the Phase 2 trials of
10 alfimeprase. CW3 worked on the Phase 2 clinical trials for CO and PAO. CW3 left Nuvelo before 11 the Phase 2 trials were completed. CW3 worked at Nuvelo while the Company was drafting the 12 protocols for the Phase 3 trials. 13 25. CW4 was a director of clinical operations with Nuvelo during the Phase 2 trials of 14
15 alfimeprase and reported to Steven R. Deitcher ("Deitcher ), VP ofMedical Affairs, who reported to
16 Love.
17 V. BACKGROUND TO THE CLASS PERIOD
18 26. Alfimeprase is a potential clot-dissolving thrombolytic agent which defendants
19 claimed degrades or dissolves clot-forming fibrin, a protein that provides the scaffolding for blood
20 clots. Alfimeprase is a derivative of an enzyme found in the venom of the southern copperhead
21 snake. Unlike other thrombolytics, alfimeprase is not a plasminogen activator. Instead, it
22 purportedly acts to degrade fibrin directly in order to dissolve the clot.
23 27. During and prior to the Class Period, Nuvelo claimed that alfimeprase can be bound
24 and neutralized by serum alpha(2)-macroglobulin, a naturally occurring protein in the blood, which
25 "traps alfimeprase to prevent its release into the systemic circulation. Nuvelo promoted alfimeprase
26 as having a lower risk of bleeding due to its rapid degradation in the bloodstream, thereby limiting
27 its activity to the area where it is administered. 28
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1 A. Nuvelo Bets Its Future on the Commercialization of Alfimeprase
2 28. At the time Love joined Nuvelo in January 2001, the Company had only $2.7 million
3 in cash. Around the same time, Amgen co-founder Rathmann, who had been named Chairman of
4 Nuvelo's Board in February 2000 and had served as President and CEO from May 2000 until Love
5 joined the Company, provided a $20 million line of credit to the Company. A $21 million private
6 placement in August 2001 kept the Company going. Still, by the end of 2001 Nuvelo's prospects
7 were growing dim; the Company was running low on cash again and had no drugs ready to move
8 into clinical trials. Desperate for cash and needing a way to reel in investors, Love sought to
9 capitalize on the Company's newfound relationship with Amgen, via Rathmann, by taking over the
10 development and commercialization of alfimeprase.
11 29. In January 2002 Love caused Nuvelo to enter into a collaboration agreement with
12 Amgen to co-develop and commercialize alfimeprase. Under the terms of the collaboration
13 agreement, Nuvelo would lead all clinical development activities and Amgen would be responsible
14 for all manufacturing activities. Amgen neither promised nor delivered any up-front payments -
15 Nuvelo was required to match Amgen's spending to date, and to share all development costs
16 thereafter equally. Under the terms of the collaboration agreement, after Nuvelo's investment
17 reached the same level as Amgen's, Amgen could then continue to jointly develop alfimeprase with
18 Nuvelo or it could simply license alfimeprase to Nuvelo, requiring Nuvelo - a small company with
19 no revenue-producing products and nothing in its pipeline - to assume full financial responsibility
20 for the commercialization of a drug which for years had already proven commercially non-viable.
21 30. With alfimeprase in hand to build a pipeline around and his newfound relationship
22 with Amgen to lend credibility, Love turned his attention to raising money. Instead ofturning to the
23 capital markets, Nuvelo acquired Variagenics, a pharmacogenomics company in Cambridge,
24 Massachusetts, which had $55.9 million in the bank. The merger, completed in February 2003,
25 served primarily as a financing vehicle for Nuvelo.
26 31. Flush with cash, Nuvelo began conducting clinical trials ofalfimeprase as a treatment
27 for dissolving blood clots in the legs (PAO) and around catheters in patients undergoing treatment
28 (CO). Nuvelo used the buildup it had created around alfimeprase as a tool for raising much needed
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cash to continue its business and fund the exorbitant pay packages provided to insiders. Nuvelo
2 began a pattern of announcing positive news about the drug shortly before selling securities to raise
3 additional operating cash. For example:
4 In a September 25, 2003 press release, Nuvelo positively reported the successful completion of its interim analysis of data from its Phase 2 trial with alfimeprase for 5 the treatment of PAO. Just a week later, Nuvelo announced the sale of 10 million shares of its common stock placed directly with institutional investors, receiving net 6 proceeds of $24.5 million. The Company paid Love a salary of $583,583 in 2003 more than double the amount the Company paid its President and CEO in 1999. 7 The Company also awarded Love 133,332 options in 2003.
8 In a February 5, 2004 press release, Nuvelo announced that it anticipated completing enrollment ofthe Phase 2 alfimeprase trials for both PAO and CO by April 2004, and 9 that it expected to initiate the Phase 3 alfimeprase trial in PAO in the second half of 2004. Two weeks later, on February 19, 2004, Nuvelo announced plans to offer 4 10 million shares of its common stock in an underwritten public offering; it ultimately sold 5.75 million shares, netting proceeds of $74.8 million. Nuvelo paid Love a 11 salary of $596,000 in 2004 and awarded him 500,000 options. Levy, who joined the Company in November 2004, was awarded 175,000 options. 12 On September 30, 2004, Nuvelo announced that Phase 2 trial results showed the 13 potential of alfimeprase to treat PAO. On December 6, 2004, Nuvelo announced data from its Phase 2 clinical trial in CO that it claimed showed the potential of 14 alfimeprase to be approved as a fast-acting drug to clear blocked catheters. Little more than a month later, on January 24, 2005, the Company commenced a public 15 offering which was completed on February 7, 2005, when the Company received proceeds of approximately $73 million in exchange for 9.775 million shares of 16 newly-issued common stock. The Company paid Love $800,000 in combined salary and bonus in 2005 and awarded him 750,000 options. The Company paid Levy a 17 salary of $381,250 and awarded him 200,000 options. The Company paid Titus a salary of $226,667, a bonus of $65,000 and awarded him 175,000 options. 18 B. Amgen Refuses to Fund Further Efforts to Commercialize 19 Alfimeprase
20 32. By November 2004, the level ofNuvelo's financial investment in the development of
21 alfimeprase had reached that of Amgen. Amgen then had an option to either pay 50% of the drug's
22 development costs going forward or to license alfimeprase to Nuvelo. Amgen pulled the plug on the
23 project, telling Nuvelo it would not further fund any efforts to commercialize alfimeprase.
24 33. Amgen's decision left Nuvelo with an incredible cash burn rate and no big-pharma
25 investment partner. Moreover, under the terms of the agreement terminating the contract between
26
27 Between May 2000 and January 2001, Rathmann, served as CEO and drew no salary. 28
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1 Nuvelo and Amgen for the joint development and commercialization of alfimeprase, in order to
2 obtain licensing rights to alfimeprase from Amgen, Nuvelo had to pay Amgen $8.5 million by
3 November 5, 2004. Heading toward the end of its fiscal year 2004 with less than $17 million in cash
4 on its books, Nuvelo again primed the capital markets with positive news about alfimeprase.
5 34. On December 6, 2004, Nuvelo announced that data from a Phase 2 clinical trial in CO
6 showed that alfimeprase had the potential to restore function in patients with blocked catheters and
7 to be a well tolerated therapy for use in catheter occlusion. "We are encouraged by these results and
8 will work rapidly to initiate a Phase 3 clinical development program in this second potential
9 indication, the Company stated in the December 6, 2004 press release. "Alfimeprase is the
10 cornerstone of a growing cardiovascular franchise at Nuvelo. The catheter occlusion data ...
11 reflects the expanded potential opportunity we have with this versatile and unique agent. Shortly
12 thereafter, on January 24, 2005, the Company announced a proposed public offering of 7 million
13 shares of common stock, and on February 7, 2005, it announced the completion of its sale of 9.775
14 million shares, receiving proceeds of approximately $73 million.
15 35. By the end of fiscal year 2005, the Company' s prospects again were bleak. Nuvelo
16 had less than $38 million in cash, and again turned to alfimeprase to bail it out of potential
17 insolvency. On December 14, 2005, the Company announced it had received a Special Protocol
18 Assessment ("SPA ) agreement from the FDA for its second Phase 3 trial of alfimeprase for the
19 treatment of acute PAO. Defendants claimed that having the FDA SPA agreement in place
20 "solidifie[d] the regulatory pathway to approval for alfimeprase.
21 36. Throughout 2005, Nuvelo continued to report on the progress towards Phase 3
22 alfimeprase trials in CO and PAO, each time making material misrepresentations about the results of
23 the Phase 2 trials. On February 15, 2005, the Company again touted the results of the Phase 2
24 clinical trials in connection with the release of its FY04 results, with Love claiming that Nuvelo had
25 become "a late-stage product company with multiple development opportunities focused on acute,
26 hospital based cardiovascular care. On April 18, 2005, the Company announced that it had begun
27 patient enrollment in the Phase 3 alfimeprase trial in PAO, representing that "alfimeprase can restore
28 arterial blood flow within four hours of initiation of dosing [and] demonstrated a favorable safety
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1 profile. On May 26, 2005, Nuvelo announced that it had finalized the design of the Phase 3
2 program for alfimeprase in CO, again misrepresenting that "[p]reviously announced results from a
3 Phase 2 multi-center, randomized, double-blind study in 55 patients with occluded central venous
4 catheters, demonstrated the ability of alfimeprase to restore function to occluded catheters in as early
5 as five minutes. On December 14, 2005, when Nuvelo announced that it had received the SPA
6 agreement from FDA for the Phase 3 trial of alfimeprase in PAO, the Company once again
7 misrepresented that the Phase 2 trial of alfimeprase in PAO "demonstrated that alfimeprase can
8 restore arterial blood flow.
9 37. However, even where blood flow was increased through a clotted blood vessel, the
10 Phase 2 PAO trial was unable to reliably determine how much ofthat result was due to the action of
11 alfimeprase versus simply the effect ofthe catheter breaking up the clot as the drug was administered
12 through the catheter. In fact, this precise risk had been discussed by CW 1 prior to the Class Period
13 with high ranking officers ofNuvelo, including Love, the Company's VP of Medical Development
14 Luis Pena ("Pena ) and Deitcher. CW 1 said that, in 2004 or 2005, s/he discussed the potential for
15 the drug delivery system to disrupt the clot during quarterly company-wide meetings regularly held
16 after each Board ofDirectors meeting. As Love admitted in a December 11, 2006 conference call in
17 response to a question about the catheters breaking down clots in the placebo group, "it's always
18 been known that mechanical devices can work.
19 VI. CLINICAL TRIALS OF ALFIMEPRASE
20 38. Under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§301-97, new
21 pharmaceutical products cannot be marketed or sold in the United States unless the sponsor of the
22 drug demonstrates to the satisfaction of the FDA that the drug is safe and effective for each of its
23 intended uses. 21 U.S.C. §§355(a)&(d). The steps required before a drug may be marketed in the
24 U. S. include: (i) preclinical laboratory and animal tests; (ii) submission to the FDA of an application
25 for an Investigational New Drug ("IND ) exemption, which must become effective before human
26 clinical trials commence; (iii) human clinical trials to establish the safety and efficacy of the drug,
27 typically proceeding in three phases; (iv) submission of a detailed New Drug Application ("NDA )
28 or Product or Biologics License Application ("BLA ) to the FDA; and (v) FDA approval of the
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1 NDA/BLA. The FDA does not approve a drug for treatment of a disease in general. Instead, a drug
2 is approved for treatment of a specific condition, or "indication, for which the drug has been tested
3 in patients. For each approved indication, the FDA will specify particular dosages and dosage
4 frequency determined to be safe and effective.
5 39. Success or failure of a clinical trial is determined by the ability ofthe trial to meet its
6 endpoints, including a demonstration that the results are statistically significant. "Statistically
7 significant means that a given result is unlikely to have occurred by random chance, or due to
8 factors outside ofthe control ofthe study. Statistical significance is measured on a scale of zero (0)
9 to one (1). A statistical significance level of 0.05 (5%) is the traditional scientific standard for
10 determining whether given results are statistically significant.3 Results are expressed as a "p-value,
11 which is a statistical measure of the probability that a difference between groups in a clinical trial
12 happened by chance. Statistical significance consisting of a p-value of less than 0.05 has
13 traditionally been considered convincing evidence by the FDA. A p-value of 0.05 means that there
14 is a 5 in 100 likelihood that the result occurred by chance. The lower the p-value, the more likely it
15 is that the difference between groups was caused by the drug, rather than by chance.
16 40. According to CW 1, the protocols for all of the clinical trials of alfimeprase were
17 written by Love, Dietcher and Pena.4 Pena had previously worked as a research associate at
18
19 3 Defendant Love stated on the December 11, 2006 conference call that "we had an agreement with the FDA that the P-value would be far lower than. 05 which would be the traditional number. 20 4 Clinical studies are accomplished pursuant to a protocol, which is a written submission to the 21 FDA as part ofthe IND. The protocol documents the manner ofdata analysis to be employed during the various phases oftesting, and is required to document the following factors: (a) a clear statement 22 of objectives and methods for final data analysis, including the establishment of "endpoints by which to measure the efficacy and safety ofthe drug; (b) a design that permits comparison ofthe test 23 group with a control group to quantitatively determine the study drug's effectiveness and safety; (c) procedures for selecting subjects that include methods for verifying that they have the condition 24 being studied; (d) a method of treatment assignment selected to minimize bias and assure comparability of subjects with respect to age, sex, severity and duration of disease, and uses of 25 concomitant therapy; (e) sufficient "blinding procedures (experimental design so that neither the doctor nor the patient is aware ofwhether the patient is receiving the experimental drug, a placebo or 26 a control) to minimize bias on the part of the subjects and investigation team; (f) outcome measures that are well-defined and reliable; and (g) an analysis chosen to determine an outcome that is 27 appropriate to the design. 28
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1 Genentech, under Love's supervision. Despite his lack ofprior experience or an advanced medical
2 degree or doctorate, Pena was hired by Love to become Nuvelo's VP of Medical Development.
3 CW 1 characterized Pena as Love's "lackey. CW4 reported that data from the Phase 2 trials was
4 used while designing the Phase 3 trials. CW4 reported that Love and Deitcher were involved in
5 designing the Phase 3 protocols along with Company statistician Fong Wang-Clow ("Wang-Clow ).
6 According to CW3 and CW4, the Company encountered difficulties in designing the Phase 3
7 protocols, including from a statistical perspective. Both witnesses reported that the difficulties were
8 due in part to the involvement ofDeitcher who had little industry experience or experience designing
9 clinical trials. CW4 indicated that Deitcher and Wang-Clow had many disagreements over the
10 design of the Phase 3 protocols. CW4 stated that he/she was concerned with the low p-value
11 imposed by the FDA on the Phase 3 CO trial, and that during his/her tenure, the low p-value
12 imposed by the FDA on the Phase 3 CO trial was a topic of discussion with Deitcher and Wang-
13 Clow. CW 1 said that, approximately six to eight months before the completion of the Phase 2
14 clinical trials, Nuvelo formed an "alfimeprase team consisting of the people primarily responsible
15 for the investigational drug. The team included Love, Deitcher, Pena, and VP ofRegulatory Affairs
16 and Quality Assurance Brian Kersten. Pena was subsequently fired by Nuvelo in 2005 and replaced
17 on the team by Levy, VP of Research and Development.
18 1. PAO Clinical Program
19 41. Nuvelo's clinical trial program for PAO was known as "NAPA, which stood for
20 Novel Arterial Perfusion with Alfimeprase. PAO occurs when arterial blood supply to the
21 extremities is occluded by a clot, thus decreasing the flow of blood to some portion of the body,
22 commonly the lower limbs. Each year, more than 100,000 Americans suffer from PAO, also known
23 as leg attack. PAO is the result of underlying peripheral arterial disease ("PAD ), in which chronic
24 fatty plaque buildup restricts blood flow. The classic early symptom of PAO is leg pain or fatigue
25 during activity that subsides with rest. Continued restriction ofblood flow leads to pain at rest and,
26 if the condition continues, can lead to ulcers, gangrene, tissue death and if untreated, foot or leg
27 amputation.
28
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1 42. Treatments for PAO include balloon angioplasty (with or without stents), open
2 vascular surgery, catheter based intervention and off-label use ofthrombolytic agents. The majority
3 ofpatients treated for PAO receive surgery, while less than half receive off-label thrombolytics for
4 24-36 hours, requiring an overnight stay in an intensive care unit in addition to an angiogram every
5 four hours to monitor the blood clot.
6 43. There are no FDA approved drugs specifically indicated for use in the treatment of
7 PAO. According to defendants, Nuvelo had the potential to capture up to half of the $400 million
8 market for treatment of PAO, because alfimeprase would provide a less-invasive and more cost-
9 effective alternative to surgery. During the Class Period, defendants were promoting alfimeprase as
10 a fast acting, safe drug therapy for PAO which, if approved by the FDA for PAO, would be the first
11 such approved therapy. However, as defendants well knew, during and prior to the Class Period,
12 several Genentech drugs were regularly being prescribed by physicians for "off-label treatment of
13 PAO, rendering the market opportunity of alfimeprase less clear than Nuvelo claimed.5
14 a. Phase 2 Study
15 44. Nuvelo's Phase 2 study of alfimeprase in PAO was a 24-center, 113 patient, open
16 label, randomized, dose escalation study evaluating the safety and efficacy of alfimeprase as a
17 treatment for acute PAO. Patients received 0.1 mg./kg., 0.3 mg./kg. or 0.6 mg./kg. of alfimeprase in
18 two separate 5-15 minute pulsed infusions administered via a side-hole catheter. The Phase 2 PAO
19 trial was a safety trial. The study's primary endpoint was safety, including major bleeding events, up
20 to 30 days after dosing. Secondary endpoints included open-surgery free survival at 14 and 30 days,
21 patency (restoration of blood flow), increase in ankle-brachial index and reduction in severity of
22 planned surgical interventions. There was no placebo arm in this study.
23 5 Use of an approved drug for any purpose other than those indications specifically approved 24 by the FDA is referred to as an "off-label use. Off-label uses include treating a condition not indicated on the label, treating the indicated condition at a different dosage or dosage frequency, or 25 treating a different patient population than those approved by the FDA. Under the Food and Drug Administration Modernization Act of 1997, if a manufacturer wished to market or promote an 26 approved drug for off-label uses, the manufacturer must comply with a set of stringent requirements prior to marketing including, submitting a supplemental application to the FDA demonstrating the 27 safety and effectiveness of the drug for treating the off-label use. 21 U.S.C. §§360aaa(b) and (c). 28
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1 45. In September 2004, investigators presented the data from the study at the
2 Transcatheter Cardiovascular Therapeutics Scientific Symposium. The data which was presented
3 revealed thrombolysis (breaking up ofclots) rates ofup to 76% and restoration of arterial blood flow
4 (rates of up to 60%) were recorded within 4 hours of initiation of dosing. None of the 113 patients
5 suffered from intra cranial hemorrhage or death. Sixty-one percent (30/49) ofthe patients receiving
6 0.3 mg./kg. of alfimeprase avoided open vascular surgery for 30 days. Only one of seven major
7 bleeding events and three of nine minor bleeding events were deemed to be possibly related to
8 alfimeprase. However, there was no correlation between thrombolysis and restoration ofblood flow
9 on the one hand and avoidance of open surgery on the other hand. That is, the groups that had
10 higher rates of thrombolysis and restoration of blood flow also had higher rates of surgery. Also,
11 avoidance of surgery was not dose related; the rate of surgery increased with increased dose.
12 b. Phase 3 Studies
13 46. After the conclusion of the Phase 2 trial, Nuvelo started a Phase 3 program in April
14 2005 . The program consisted oftwo overlapping trials, NAPA-2 and NAPA-3, which were expected
15 to enroll a total of approximately 700 patients . According to CW3 and CW4, the Company
16 encountered difficulties in designating the Phase 3 protocols, including from a statistical perspective.
17 47. The first trial, NAPA-2, which opened in April 2005 , enrolled approximately 300
18 patients randomized to receive either 0.3 mg./kg. ofalfimeprase or placebo. Patients must have had
19 the onset of symptoms within 14 days of randomization. No plasminogen activators were allowed.
20 In contrast with the Phase 2 PAO study, the primary endpoint of NAPA-2 was avoidance of open
21 vascular surgery at 30 days. Enrollment was completed in September 2006. According to CW2,
22 Nuvelo had great difficulty enrolling patients for NAPA because the trials were randomized, double-
23 blind studies, meaning that neither patients nor their doctors would know whether they were being
24 treated with alfimeprase or a placebo. Most patients eligible for the study opted instead to receive
25 treatment with a Genentech thrombolytic drug that, while not approved by the FDA for treatment of
26 PAO, was regularly prescribed by physicians for that purpose because it had a 70% success rate in
27 busting the clot and avoiding risky surgery. As a result of the difficulties in enrolling patients, as
28 well as knowledge of the market and competition, Nuvelo and its employees involved in the
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1 alfimeprase trials , including Love, knew that alfimeprase would face substantial competition from
2 such "off-label uses of drugs approved for other conditions.
3 48. On January 23, 2006, Nuvelo announced that the FDA had granted "fast track status
4 for the PAO program, which provides for accelerated regulatory filings and review.
5 49. Nuvelo announced the initiation ofNAPA-3, its second Phase 3 trial, in April 2006.
6 NAPA-3 was patterned after NAPA-2 and was subject to an SPA from the FDA.
7 2. CO Clinical Program
8 50. Nuvelo's clinical program for CO was known as SONOMA, which stood for Speedy
9 Opening ofNon-functional Occluded catheters with Mini-dose Alfimeprase. CO is the formation of
10 blood clots in patients with catheters. An estimated 5 million catheters are placed in patients in the
11 United States each year to deliver chemotherapy, nutritional support, antibiotics and blood products.
12 Occluded (blocked) catheters are a problem in about a quarter ofthe 5 million cases where catheters
13 are placed in patients each year. Occluded catheters are currently cleared using thrombolytic drugs,
14 such as Genentech's tPA, Activase (alteplase), which restores function to venous catheters in two to
15 four hours, or by more costly means, such as removing and replacing the catheter.
16 a. Phase 2 Study
17 51. In 2004, Nuvelo conducted a Phase 2, multi-center, randomized, double-blind study
18 ofpatients with occluded central venous catheters. The study compared three doses of alfimeprase
19 (0.3 mg., 1.0 mg. and 3.0 mg.) against Genentech's approved dose ofplasminogen activator Cathflo
20 Activase ("Cathflo ) (alteplase) (2.0 mg.). The study was to be conducted in up to 100 patients
21 across 32 centers in the United States.
22 52. On June 8, 2004, Nuvelo issued a press release announcing the "successful
23 completion of a planned interim analysis of its Phase 2 trial with its lead product candidate,
24 alfimeprase, for the potential treatment of venous catheter occlusion. The June 8th press release
25 stated that a planned interim analysis had been conducted on data from the first 48 patients enrolled
26 in the trial, and that, following review ofthe data for those patients, the Data Safety and Monitoring
27 Board and the Trial Operations Committee recommended that the trial continue to enroll in the two
28 highest dose groups, 1.0 mg and 3.0 mg, compared to the approved dose ofCathflo, thus eliminating
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1 the lowest dose of 0.3 mg from further enrollment. The June 8th press release further stated that this
2 study had begun in June 2003, and "is being conducted in approximately 90 patients.
3 53. Approximately one month later, on July 12, 2004 Nuvelo issued a press release
4 announcing that "the Company has decided to close its Phase 2 alfimeprase trial in patients with
5 occluded central venous catheters sooner than expected in order to accelerate the program. The
6 Phase 2 trial concluded with 56 patients dosed. The July 12, 2004 press release further stated that a
7 Data Safety and Monitoring Board analysis indicated that there were no safety concerns in any ofthe
8 alfimeprase dose groups, and quoted the statement of the Company's VP of Medical Affairs
9 Deitcher, that "We believe this data is more than sufficient to guide our continuing development
10 efforts. The July 12th press release also revealed that the "study was designed to treat up to 100
11 patients....
12 54. In early December 2004, data for the 55 patients enrolled in the Company's Phase 2
13 clinical trial of alfimeprase for use in restoration of function in catheter occlusion were reported in a
14 December 6, 2004 Nuvelo press release, presented by Deitcher at the Annual Meeting and
15 Exposition of the American Society of Hematology, and posted on the Company's website. The
16 December 6, 2004 press release reported that the 3.0 mg alfimeprase dose produced cumulative flow
17 (patency) rates of 50% at 15 minutes after the first dose, 60% at 120 minutes after the first dose, and
18 80% at 120 minutes after the second dose. In contrast, Cathflo produced patency rates of 0% at 15
19 minutes after the first dose, 46% at 120 minutes after the first dose, and 62% at 120 minutes after the
20 second dose. According to the December 6th press release there were no major hemorrhagic events
21 in any treated patients. In addition, that press release noted that "[w]hen a catheter becomes
22 occluded, the ultimate goal is to restore patency (i.e., flow) in a timely and cost effective manner
23 with minimal risk to the patient.
24 b. Phase 3 Studies
25 55. In May 2005 , Nuvelo announced its Phase 3 clinical trial program for CO. Nuvelo
26 conducted two Phase 3 trials : SONOMA-2 and SONOMA-3. According to CW3 and CW4, the
27 Company encountered difficulties in designating the Phase 3 protocols, including from a statistical
28 perspective.
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1 56. The first trial, SONOMA-2, enrolled its first patients in September 2005 and
2 completed enrollment in September 2006. SONOMA-2 was a randomized, double-blind, 300 patient
3 trial, comparing 3 mg. alfimeprase against placebo as a treatment for patients with occluded central
4 venous catheters. Two-thirds of the 300 patients received alfimeprase and the remainder received
5 placebo. The primary endpoint ofthe SONOMA-2 trial was the restoration of function to occluded
6 central venous catheters at 15 minutes, i. e., the success ofthe trial was to be judged by the statistical
7 difference in the restoration of function between the alfimeprase group and the placebo group.
8 57. The second trial, SONOMA-3, began enrollment in February 2006 and was designed
9 as an open-label, single-arm trial evaluating the safety of alfimeprase in 800 patients.
10 58. Investors reasonably understood and expected that Nuvelo would have to demonstrate
11 statistical significance to a p-value of 0.05. On December 11, 2006, defendants admitted that the
12 results of SONOMA-2 did not meet the extraordinarily high threshold for regulatory approval
13 required by the FDA for the Nuvelo trial. Love admitted that "we had an agreement with the FDA
14 that the p-value would be far lower than 0.05 which would be the traditional number.
15 Subsequently, on June 26, 2007, Nuvelo admitted that thep-value requirementfor SONOMA-2 was
16 less than 0.00125:
17 Data from the first Phase 3 trial in the CO program, SONOMA-2, showed that alfimeprase restored catheter function in patients with 18 occluded catheters within 15 minutes with a p-value of 0.022. It did not, however, meet the more stringentp-value requiredfor a single 19 pivotal trial, less than 0.00125, nor did it meet the company 's target productprofilefor commercial success.6 20 59. A p-value of 0.00125 is extraordinarily low, and is virtually unheard of in the 21 industry, as it is exceedingly difficult to meet. Plaintiffs have been unable to identify even one 22 example of another FDA drug trial that was required to meet such a low p-value. 23 3. Nuvelo Announces Failure of Both PAO and CO Phase 3 Trials 24 60. Before the opening of trading on December 11, 2006, Nuvelo and Bayer 25 unexpectedly issued a press release announcing the failure of both the PAO and CO Phase 3 trials. 26
27 6 Emphasis added unless otherwise noted. 28
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The release, entitled "Nuvelo and Bayer Healthcare Announce Phase 3 Trials of Alfimeprase in
2 Patients With Acute Peripheral Arterial Occlusion and Catheter Occlusion Did Not Meet Primary
3 Endpoints, stated in relevant part:
4 Nuvelo, Inc. (Nasdaq: NUVO) and Bayer HealthCare today announced top-line data demonstrating that the Phase 3 clinical trial 5 of alfimeprase in acute peripheral arterial occlusion (PAO), known as NAPA-2 (Novel Arterial Perfusion with Alfimeprase-2), did not meet 6 its primary endpoint of avoidance ofopen vascular surgery within 30 days of treatment . The companies also announced that the Phase 3 7 trial in catheter occlusion (CO), known as SONOMA-2 (Speedy Opening of Non-functional and Occluded catheters with Mini-dose 8 Alfimeprase - 2), did not meet the endpoint of restoration of function at 15 minutes. These trials did not meet key secondary endpoints. In 9 addition, the companies announced that they have temporarily suspended enrollment in the ongoing Phase 3 trials , NAPA-3 and 10 SONOMA-3, until further analyses and discussions with outside experts and regulatory agencies are completed. 11 These data will be submitted for presentation at the next 12 appropriate medical meetings.
13 `These outcomes are disappointing particularly for patients with acute PAO, who have few treatment options,' said Dr. Ted W. Love, 14 chairman and chief executive officer ofNuvelo. `We and our partner Bayer will conduct further analyses and have discussions with the 15 Data Safety and Monitoring Board members, outside experts and regulatory authorities to determine how to proceed with the 16 development of alfimeprase, including the possibility of alternative dosing and delivery.' 17 61. During a December 11, 2006 conference call following the announcement, Love 18 explained that in the PAO trial, although alfimeprase dissolved some clots, the drug failed to perform 19 significantly better than the placebo because a substantial number ofclots had not been dissolved by 20 the drug, but had instead been broken up by the insertion of a catheter into the clot in patients who 21 received a placebo. When pressed, Love and Levy admitted that since none ofthe Company's prior 22 clinical testing had included the use of a placebo, any past instances ofalfimeprase "dissolving blood 23 clots was more likely than not simply attributable to the clots being broken up by the insertion of a 24 catheter directly into the clots - rather than any "dissolving effect the drug had. Additionally, 25 defendants admitted that even if they could increase the dosage of alfimeprase to increase its 26 thrombolytic clot busting effect for PAO, it could likely be prohibitively unsafe to do so, as there 27 was an increased incidence of bleeding in patients with alfimeprase as compared to the placebo. 28
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1 62. During the conference call, Love was specifically questioned on whether insertion of
2 the catheter had an effect on the Phase 2 trial - and he was forced to admit it had:
3 Jim Birchenough [Lehman Brothers analyst]: So I'm just trying to understand why that might not have happened in the Phase II 4 experience where it seems that you had higher thrombolysis rates?
5 Dr. Ted W. Love: ... I actually think it did probably happen in Phase H. 6 63. In addition, Love admitted in the conference call that the CO trial also faced far 7 greater risks than previously revealed: 8 While the data from the SONOMA-2 trial show a statistically 9 significant difference in the rate at which alfimeprase and placebo dissolved clots in venous catheters at 15 minutes, this result did not 10 meet the high threshold established by the FDA for regulatory approval based on only one control trial. 11
12 [WJe had an agreement with the FDA that the P-value would befar 13 lower than .05 would be the traditional number. We were below that number. 14 64. Nuvelo has yet to publish data regarding the conduct or results ofthe Phase 3 trials in 15 any medical journal, which has caused some members of the scientific community to question 16 Nuvelo's scientific integrity.? As CW2 stated, it is "ridiculous, and "non-scientific not to publish 17 results from clinical trials, whether or not the results were positive. In addition, Nuvelo has 18 contacted numerous potential witnesses in this action, encouraging them not to discuss anything 19 related to the Phase 3 clinical trials of alfimeprase with plaintiffs or their investigators. This 20 conduct, designed to conceal the full extent of defendants' misconduct, contrasts starkly with the 21 Company's rush to disclose favorable trial results when it was raising money from the public. 22 65. On June 26, 2007, Nuvelo conducted another conference call following the 23 announcement that Bayer, like Amgen before it, had pulled the plug from further efforts to 24 commercialize alfimeprase. During that call, defendant Levy revealed that, in addition to an 25
26 7 On November 7, 2007, Nuvelo announced that data from the Phase 3 CO trial will be presented at a meeting in Atlanta next month, a year after the results of the failed trial were 27 announced. 28
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extremely stringent p-value, alfimeprase also hadfailed to meet itspreviously undisclosed "target
2 profile," thus rendering it unmarketablefor CO:
3 [Levy] : The second indication we are pursuing is catheter occlusion. Data from the first Phase 3 trial from this program, SONOMA-2 4 showed that while Alfimeprase restored catheter function in patients with occluded catheters within 15 minutes with a p-value of .022, it 5 did not meet the more stringent p-value required for a single pivotal trial of less than . 00125. 6 While the p-value achieved in SONOMA-2 accompanied by a second 7 controlled trial with comparable results could potentially support registration, it likely would not meet the target product profile we 8 believe necessary for commercial success in the marketplace. Accordingly, we have decided to investigate whether a single, higher, 9 more concentrated dose of Alfimeprase would generate results more consistent with the desired target product profile for this indication. 10 66. In an August 1, 2007 conference call with analysts, Levy provided further insight on 11 the undisclosed "product profile : 12 [Analyst] William Ho: ... And why do you think the catheter 13 occlusion will work just at the higher doses?
14 Dr. Michael Levy: Well, I think it's important to recognize that on some level, catheter occlusion did work in the preceding Phase 3 trial. 15 It worked to the extent that we were able to confirm it was an active thrombolytic . It worked to the extent that we were able to get a p- 16 value better than . 05, which is the standard test for scientific significance. 17 But what it didn't do was at the p-value that we set for regulatory 18 approval with a single trial and it didn 't hit the targetproductprofile that we were looking for to be successful in this marketplace. 19 Clearly, the marketplace today is only around $100 million and to be successful, you really have to have a very goodproductprofile. 20 67. On August 22, 2007, the Company announced that it was re-initiating the SONOMA- 21 3 trial of alfimeprase in patients with CO. The revised trial was designed to determine whether a 22 single, higher, more concentrated dose of alfimeprase could restore function to blocked central 23 venous catheters within 15 minutes. On the news, Nuvelo's shares rose 26 cents or 16 %, to $1.89 in 24 afternoon trading. Brean Murray Carret & Co. ("Brean Murray) analyst Jonathan Aschoff 25 ("Aschoff ) upgraded the stock to "Hold from "Sell and removed his target price of $2 per share. 26 However, Aschoff wrote that the past trial results show the drug will not succeed: "We view the 27
28
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1 alfimeprase program mostly as terminal, given that the drug failed to deliver on either its primary
2 or any key secondary endpoints in either the NAPA-2 or SONOMA-2 Phase 3 trials ....
3 VII. DEFENDANTS' SCHEME TO DEFRAUD
4 A. Defendants Falsely Represented the Significance and Reliability of the Phase 2 Alfimeprase Trial Data, and Conceal Material Risks to FDA 5 Approval and Commercial Marketability for PAO and CO.
6 68. Throughout the Class Period, Nuvelo and its top officers repeatedly claimed that the
7 Phase 2 trials had demonstrated alfimeprase's ability to dissolve clots in patients with acute PAO,
8 and cleared blocked catheters much more quickly than existing treatments. Simultaneously,
9 defendants proclaimed that the Phase 3 PAO and CO trials represented a "low risk path to FDA
10 approval with a "high probability of success. At the same time, however, defendants failed to
11 specifically disclose the significant risks that affected the then-ongoing Phase 3 trials, including
12 known limitations of the Phase 2 trials. Together, these statements and omissions misled investors
13 both about the quality and reliability of the Phase 2 data and the existing risks to success in the
14 ongoing Phase 3 trials.
15 69. Investors had repeatedly been reassured ofthe efficacy ofalfimeprase as compared to
16 a placebo. For example, a May 2, 2005 statement at the Company' s earnings conference, that would
17 be reconfirmed repeatedly throughout the Class Period, claimed that the Company had "power
18 calculations that clearly established the efficacy of alfimeprase as compared to a placebo.
19 Defendants failed to disclose that the "power calculations were based upon placebo assumptions
20 which had no reasonable basis in fact because defendants did not know how many patients avoided
21 open surgery for 30 days as a result of the catheter insertion breaking up the clot. Defendant Levy
22 falsely claimed that the numbers in the Phase 3 trial are driven by "the need to put in place a good
23 size safety database rather the need to confirm the efficacy of this drug, which we are all very
24 bullish on obviously.
25 70. Nuvelo never disclosed any of the specific risks that rendered success in the Phase 3
26 trials much less likely than represented. Rather, Nuvelo's periodic reports filed with the SEC during
27 (and prior to) the Class Period contained only general and generic risk warnings, such as "Our near-
28 term success is dependent on the success of our lead product candidate, alfimeprase, and we cannot
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be certain that it will receive regulatory approval or be successfully commercialized, and "We face
2 heavy government regulation, and FDA and international regulatory approval of our products is
3 uncertain. However, the reports did not contain any specific risk warnings regarding the Phase 2
4 trials, the possibility that the results ofthose trials were caused by the catheter being pushed through
5 a blood clot, the extraordinary statistical significance barrier imposed on the SONOMA Phase 3 trial,
6 or that the Company had an undisclosed target product profile which was necessary to meet in order
7 to market the drug for CO.
8 71. Rather, Love and Levy frequently told investors that Nuvelo was starting with PAO
9 and CO because it provided a "low risk path to regulatory approval or a "rapid & low risk entry
10 strategy with a "high probability of success. In addition, defendants represented that following
11 approval ofthe PAO and CO indications, Nuvelo claimed it would be able to use alfimeprase to treat
12 stroke victims and patients suffering with deep vein thrombosis, both potentially huge markets. This
13 theme would be repeated throughout the Class Period. In a presentation to investors, for example,
14 Nuvelo graphically illustrated its claims that its "low risk entry strategy with a "high probability of
15 success would lead to enormous revenue growth:
16
17 Strategic Drug Developrnent
18 Revenues ...... Additions ! Label `^ Expansion 19 Opportunities r` • 20 High Value Expansion pf)tclAol Strategy t f 21 jinlitD^ spe-ad
22 Ra id & Low Risk f' r • ntry Strategy : E • 23
24
r`4 Nuvelo- wlw^^ 12 25
26 72. On January 5, 2006, the first day of the Class Period, Nuvelo announced it had
27 entered into a new financial alliance - this time with Bayer. The Bayer deal provided a $50 million
28 upfront payment to Nuvelo and included up to $385 million in additional fees and payments. The
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1 Company's stock price surged on the January 5, 2006 announcement, increasing 41%, its largest
2 increase in six years on extremely high volume. During a conference call that day, Love claimed
3 PAO and CO were just "the tip of the iceberg for the drug:
4 Cory Kasimov, Analyst, Oppenheimer & Co: ... You have long talked about the potential market opportunity for Alfimeprase and the number you've consistently 5 thrown out there is greater than $500 million in worldwide market potential. How does that change now with the confirmation that you will indeed be taking 6 Alfimeprase into the clinic to evaluate it against both stroke and DVT?8
7 Dr. Ted Love: The number certainly goes up quite dramatically. The $500 million number that you reference is in fact an accurate number. We built that number off 8 looking at two indications. And with the two indications that we had under study, that is acute PAO and catheter occlusion. It has been very clear to us from the very 9 beginning that stroke and DVT are much larger market opportunities. But we did not start with those indications because ofthe development strategy was reallyfocused 10 on going after indications which will be rapid to market, which would demonstrate the superior advantage of the compound in terms of its fast speed of action and 11 wouldprovide a low-risk regulatory path for approval Now that we've got those programs obviously well underway, we plan to turn our attention to DVT, stroke, 12 other indications to really exploit the full commercial potential and the full medical benefit of the product. 13 73. Market analysts and investors reasonably understood Nuvelo's deal with Bayer as an 14 endorsement of alfimeprase. In a January 5, 2006 Company Alert, Deutsche Bank Securities Inc. 15 ("Deutsche Bank ) analyst Jennifer Chao ("Chao ) reported, "In our view, this collaboration 16 significantly validates the science and clinical/regulatory strategy for alfimeprase as a potential 17 blockbuster thrombolytic. Similarly, Prudential Equity Group, LLC ("Prudential ) analyst Jason 18 Zhang ("Zhang ) reported, "We are encouraged by the timing of this partnership announcement as 19 we think that it validates the [alfimeprase's] potential, even in its pre-approval stage of 20 development. Oppenheimer & Co., Inc. ("Oppenheimer ) even raised the profile ofNuvelo's stock 21 based on the Bayer agreement: "Based on Bayer agreement, we are increasing our 12-month target 22 price to $18 from $13. 23 74. That same day, CIBC World Markets analysts stated in a report upgrading Nuvelo to 24 "Sector Outperformer : "We believe the partnership provides substantial validation for the safety, 25 efficacy, and market potential of alfimeprase. Unaware of the stringent p-value requirement 26
27 8 DVT refers to deep venous thrombosis. 28
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1 imposed on the Phase 3 CO data by the FDA or that the Phase 3 PAO trial was at risk of failing
2 because positive results were simply caused by the breaking up of clots by a catheter, the analysts
3 wrote in the same report with respect to the Phase 3 CO program: "Based on the phase II data, we
4 believe the phase III catheter occlusion program has a high chance of success.... The phase II data
5 . showed strongly superior efficacy at 15 minutes to alteplase ... at all tested doses. The analysts
6 further noted that "alfimeprase is likely to succeed in ph.III studies for PAO and CO, and
7 specifically regarding trials for PAO, "We believe the study is substantially overpowered and has a
8 high probability of success.
9 75. On January 23, 2006, the Company announced it had been granted FDA "Fast Track
10 Status for alfimeprase. Love stated that "Fast track designation represent[ed] a further step in the
11 achievement of [the Company's] regulatory strategy .... Again, unaware of the stringent
12 requirements placed on the alfimeprase development program by the FDA and other undisclosed
13 risks to FDA approval, the market reacted favorably to Love's announcement. CIBC World Markets
14 analysts noted that "[f]ast track status will allow NUVO to submit a `rolling' NDA for alfimeprase
15 and may signal a willingness by the FDA to consider accelerated review. Furthermore "while the
16 receipt of Fast Track designation for alifineprase (sic) in PAO is not surprising, we believe it is
17 positive and may provide a shorter course to market for alfimeprase. We believe ph.III trials of
18 alfimeprase in PAO and CO are likely to succeed and expect the stock to appreciate into ph. III data.
19 76. On January 24, 2006 the Company again used apparently good news to tap the
20 financial markets, announcing it would conduct a Follow-On Offering of 5.5 million shares
21 underwritten by JP Morgan, Lehman Brothers, Inc. and Deutsche Bank. On January 31, 2006, the
22 Company issued and sold approximately 7.5 million shares of its common stock at $16 per share in
23 the offering, receiving over $119 million in proceeds.
24 77. On February 27, 2006, the Company announced that it had begun patient enrollment
25 in SONOMA-3, a second pivotal study of alfimeprase for the treatment of CO. On this and other
26 positive statements made by defendants, analysts such as Caroline Stewart at Morgan Joseph &
27 Company Inc. ("Morgan Joseph ) increased their price targets by 56% - from $16 to $25 per share.
28
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1 In a February 28, 2006 report, Deutsche Bank analyst Chao similarly raised the price target for
2 Nuvelo stock from $18 to $24.
3 78. In a CIBC World Markets analyst report dated February 28, 2006, the analysts,
4 unaware that the p-value requirement for SONOMA-2 (Phase 3 trial for CO) was less than 0.00125,
5 which was forty times less than the p-value typically imposed by the FDA or that the NAPA trials
6 for PAO were at risk of failing because positive results were simply caused by the insertion of a
7 catheter into a blood clot, reiterated their January 5, 2006 positive outlook: "Alfimeprase is likely to
8 be effective in PAO and CO. Regarding the Phase 3 trial for PAO, the analysts repeated, "We
9 believe the study is substantially overpowered and has a high probability of success. And with
10 respect to CO, the analysts wrote: "The phase II data in this indication demonstrated strongly
11 superior efficacy at 15 minutes to alteplase ... at all tested doses, and based on this data we believe
12 the phase III program has a high probability of success.
13 79. Nuvelo announced that it had begun patient enrollment in a second Phase 3 trial of
14 alfimeprase for PAO - NAPA-3 - on April 10, 2006, again reiterating that the Phase 2 PAO trial
15 purportedly showed that alfimeprase "can restore arterial blood flow within four hours of initiation
16 of dosing [and] has a favorable safety profile with minimal bleeding complications.... These
17 statements were repeated again on May 5, 2006, when Nuvelo announced first quarter 2006 financial
18 results. That same day, still unaware of the undisclosed risks to FDA approval, Oppenheimer
19 analysts wrote, "Based primarily on Phase II trial results, we have a high conviction level that both
20 studies [NAPA-2 and SONOMA-2] will be successful. Similar sentiments were reflected in a June
21 19, 2006 Needham & Company, LLC ("Needham ) report following the Company's analyst day,
22 which stated: "[W]e believe that prior clinical trials have demonstrated that alfimeprase is an
23 effective clot buster.
24 80. On July 6, 2006, the Company announced the publication ofPhase 2 alfimeprase trial
25 results in CO in the July 1, 2006 issue of the Journal of Clinical Oncology. In the press release,
26 Nuvelo stated that the results "demonstrat[e] that alfimeprase can quickly restore function to
27 occluded central venous access devices (CVADs). Love stated: "Based on these promising Phase 2
28 results, we have initiated two overlapping, multi-national Phase 3 trials evaluating the 3 mg dose of
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1 alfimeprase in catheter occlusion. We anticipate data from the first of these trials, the SONOMA-2
2 trial, in the second half ofthis year, and hope to confirm the ability ofalfimeprase to restore function
3 to occluded catheters in 15 minutes or less. In a Company Alert issued that same day, Deutsche
4 Bank repeated the Company's announcement that the results showed "that alfimeprase can restore
5 function to occluded central venous access devices (CVADs), and reiterated its "Buy
6 recommendation.
7 81. On August 3, 2006, Nuvelo announced second quarter 2006 financial results, again
8 taking the opportunity to tout alfimeprase's Phase 2 results. Following Nuvelo's conference call
9 announcing the results, on August 4, 2006, Brean Murray, unaware ofthe undisclosed risks to FDA
10 approval, reported, "During the Q&A session of the conference call, Nuvelo indicated that in the
11 NAPA-2 trial, alfimeprase was working well in large and small clots, as well as in old and new
12 clots. Similarly, in a CIBC World Markets analyst report of the same day, the analysts, remaining
13 in the dark, reiterated their belief that "alfimeprase has a high probability of success in PAO and
14 CO. Regarding the Phase 3 trial for PAO, the analysts repeated, "We believe the study is
15 substantially overpowered and has a high probability of success. With respect to CO, the analysts
16 wrote: "The recently published phase II data for alfimeprase in this indication demonstrated superior
17 efficacy at 15 minutes to alteplase at all tested doses.... Based on this data we believe the phase III
18 program has a high probability of success.
19 82. By late summer, more analysts had initiated coverage of Nuvelo due to the
20 significance of alfimeprase. Miller Johnson Steichen Kinnard Investment Securities ("Miller
21 Johnson ) initiated coverage ofNuvelo in an August 23, 2006 analyst report in which it noted that
22 for both PAO and CO, alfimeprase "has potential to emerge as the standard of care, addressing peak
23 market sales potential in excess of $500MM. Similarly, a September 12, 2006 Wachovia Capital
24 Markets, LLC ("Wachovia ) report initiating coverage of Nuvelo touted the Phase II results of
25 alfimeprase for both the PAO and CO indications: "Relatively simple path to approval: Data from a
26 Phase II trial evaluating alfimeprase efficacy and safety in 113 patients with peripheral arterial
27 occlusion (PAO) supports the likelihood of a positive Phase III outcome for this niche indication and
28 a relatively simple means to market, in our view. Phase II data in catheter occlusion (CO) also
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1 confirms activity with top-line Phase III results from both indications potentially ready for release in
2 Q4 2006. The report further noted as its investment summary: "alfimeprase is well positioned to
3 become the standard of care for treating all blood clot disorders ....
4 83. The pattern repeated itself again when Nuvelo announced its third quarter 2006
5 financial results on November 2, 2006, again misrepresenting alfimeprase's Phase 2 results and
6 Phase 3 prospects. Still, unaware of the undisclosed risks, analysts, like Oppenheimer, maintained
7 "a high level of conviction for a successful outcome for [NAPA-2 and SONOMA-2].
8 B. Defendants' Scheme Unravels.
9 84. Prior to the start of trading on December 11, 2006, the investment community was
10 shocked when Bayer announced that alfimeprase had completely failed to meet the primary
11 endpoints in the clinical trials for both PAO and CO. The primary endpoint for the PAO trial was
12 preventing patients with blood clots in their legs from needing surgery within 30 days of taking the
13 drug. The trial failed to reach it. The primary endpoint for the CO treatment study was the ability to
14 unblock catheters within 15 minutes of taking the drug, demonstrated to a p-value of 0.00125. The
15 trial failed to reach it. The clinical trials also failed to reach any of their key secondary endpoints.
16 Supra, ¶110, 47, 56, 60-63.
17 85. In reaction to the news ofthe failure ofthe NAPA-2 and SONOMA-2 trials before the
18 market opened on December 11, 2006, the price ofNuvelo shares plunged 80%, to their lowest level
19 in over three and a half years , making Nuvelo the biggest percentage decliner on the NASDAQ
20 composite . Nuvelo's stock closed at $4.05 a share, down $15 . 50 a share in unusually heavy trading
21 of 90 million shares , more than 176 times the average daily trading volume. Nuvelo's stock had
22 been trading an average of 450,000 shares a day in recent weeks . At one point, the stock fell as low
23 as $3.35 , its worst performance since April 2003 , prompting an immediate chorus ofnegative analyst
24 comments including downgrades. Nuvelo's options became worthless.
25 86. For example, UBS Investment Research ("UBS ) analyst Maged Shenouda
26 downgraded Nuvelo to "Reduce from "Buy. The Company's target price went to $3 from $28.
27 Shenouda said Bayer is likely to exit the collaboration in the first quarter of 2007. At Oppenheimer,
28 analyst Cory Kasimov ("Kasimov ) downgraded the Company to "Neutral from "Buy and
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1 removed his $24 price target. Kasimov added that the rest of the Company's pipeline is high risk
2 and at an early stage of development, and that there is concern that Bayer could potentially walk
3 away from the alfimeprase partnership. Wachovia analyst George Farmer cut his rating to market
4 perform from outperform, saying he saw only "modest value in the remainder ofNuvelo's pipeline.
5 He valued the stock between $3 and $5. JP Morgan downgraded the stock to neutral from
6 overweight, explaining that alfimeprase had been a key driver in Nuvelo's investment value - and
7 valued the Company at the $3 per share cash it had on its books.
8 87. In a December 11, 2006 Prudential report, analyst Zhang wrote:
9 Sometimes, when a stock is hammered badly after failure of a key clinical trial, it could be a good buying opportunity if the trial could be salvaged or if the drug is in 10 other clinical trials that could yield positive data to support further development or approval. We believe that is not the case here. Alfimeprase is the main drug from 11 Nuvelo's pipeline and represents more than 80% ofthe company's value. Without a reasonable expectation this drug would be approved for the two indications the 12 company sought, the stock is unlikely to recover anytime soon.
13 88. Also, on December 11, 2006, analysts Kasimov and Sa'ar Yaniv, of Oppenheimer
14 issued an analyst report entitled "Downgrading to Neutral on Alf Failure stating:
15 Is alfimeprase dead ? On the heels of these results, enrollment has been suspended in the Phase III NAPA-3 study in PAO (- 100 pts enrolled to date) and SONOMA-3 16 study in CO (-250 pts enrolled to date). Planned Phase II trials in stroke and DVT have also been postponed. Additionally, we are concerned that Bayer (BAY, $52.48, 17 Not Covered) could potentially walk away from the alfimeprase partnership.
18 What else does NUVO have? Aside from alfimeprase, the rest ofNUVO' s pipeline is early and high risk.... 19 89. On June 26, 2007, Nuvelo announced Bayer had terminated its partnership with 20 Nuvelo. In response to the Company's announcement, analysts expressed further pessimism about 21 alfimeprase and on June 26, 2007, shares of Nuvelo fell $0.74, or 22%, to $2.60 in after hours 22 trading, after falling $0.01 to close at $3.34. On June 27, 2007 Brean Murray analyst Aschoffwrote 23 that the Bayer partnership was critical to Nuvelo's cash flow and reiterated a $2 price target: "We are 24 uncertain as to how and why Nuvelo will fund the development of Alfimeprase, considering it has 25 already failed to meet its primary endpoint in two Phase 3 trials. Banc of America Securities LLC 26 ("Banc of America ) analyst William Ho, maintaining a "Neutral rating and a $3.50 target price, 27 said there was little chance the drug will succeed in new trials. 28
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1 90. On August 1, 2007, Nuvelo announced that it was terminating employees to reduce its
2 workforce by approximately 30% and realigning its organization to focus on core development
3 programs that it believes will produce nearest-term proof of concept data. As a result of the
4 reduction in workforce, effective August 3, 2007, the Company stated that it expected to have less
5 than 80 employees, a reduction of 45% from 2006, and expected this realignment of personnel and
6 programs to result in reduced annual expenses of about $15 million from current levels. As part of
7 the reorganization, H. Ward Wolff, Senior VP and CFO left the Company effective August 14, 2007.
8 VIII. FALSE AND MISLEADING STATEMENTS DURING THE CLASS PERIOD 9 91. Throughout the Class Period, defendants mischaracterized the results ofthe Phase 2 10 trials of alfimeprase for CO and PAO and the design and parameters of the Phase 3 trials and 11 misrepresented the risks associated with approval of alfimeprase for treatment of CO and PAO. 12 Each defendant is liable for (i) making false statements and/or (ii) failing to disclose adverse facts 13 known to him about Nuvelo. Defendants ' fraudulent scheme and course ofbusiness that operated as 14 a fraud or deceit on purchasers of Nuvelo securities was a success, as it: (i) deceived the investing 15 public regarding Nuvelo's prospects and business, and specifically the prospects for the Company's 16 leading drug candidate , alfimeprase; (ii) artificially inflated the prices of Nuvelo securities; (iii) 17 allowed defendants to arrange to sell and actually sell $ 119 million worth of Nuvelo securities at 18 artificially inflated prices in the Follow-On Offering; (iv) allowed defendants to draw huge salaries 19 and obtain large bonuses which were directly tied to the Company' s financial success ; (v) permitted 20 defendant Titus to sell $ 1.5 million worth of Nuvelo stock at inflated prices; and: (vi) caused 21 plaintiffs and other members ofthe Class to purchase Nuvelo's publicly traded securities at inflated 22 prices. 23 A. Defendants' January 5, 2006 False and Misleading Statements 24 92. Before the opening oftrading on January 5, 2006, Nuvelo and Bayer issued a release 25 entitled "Nuvelo and Bayer HealthCare Enter Comprehensive Collaboration Agreement to Maximize 26 Global Development and Commercialization of Alfimeprase, which stated in relevant part: 27 Nuvelo, Inc. (Nasdaq: NUVO) today announced that it has 28 entered into a collaboration agreement with Bayer HealthCare AG
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1 (BHC) to maximize the global development and commercialization of alfimeprase, Nuvelo's lead Phase 3 product candidate. Alfimeprase, 2 a novel, first-in-class thrombolytic or blood clot dissolver that directly degrades fibrin, has been shown in clinical studies to 3 provide rapid clot dissolution with a well tolerated safety profile.
4 93. Also on January 5, 2006, Nuvelo conducted a conference call with analysts to discuss
5 the Bayer deal. Defendants Love, Titus and Levy each participated in and spoke on behalf of
6 Nuvelo during the call. At the outset of the call, Love repeated the information contained in the
7 press release, and also claimed that alfimeprase "has blockbuster potential that could become a
8 "transformational therapy, much like serotonin reuptake inhibitors were in Depression, a reference
9 to one of the biggest-selling class of drugs on the market:
10 [E]veryone that came in the door quite frankly was consistently impressed with the data that we generated with Alfcmeprase, 11 suggesting a dramaticfeat ofaction and also its safety profile which emanates from the inactivation by alpha-2 macroglobulin. And it is 12 really that profile and the confidence that that profile will be demonstrated in Phase III that generated excitement at Bayer and 13 generated excitement quite frankly in every organization that we spoke with. ... So I think it really is looking forward recognizing that 14 there are a great deal of thromboembolic disease out there, probably 10 million patients worldwide that really are not being well served 15 with current therapies and Alfimeprase could deliver that unmet medical need. 16 94. Defendant Love explained that Nuvelo started with the PAO and CO indications 17 because they would provide a "low-risk regulatorypathfor approval, from which defendants could 18 expand alfimeprase to the much larger markets for stroke and DVT: 19 It has been very clear to us from the very beginning that stroke and 20 DVT are much larger market opportunities. But we did notstart with those indications because of the development strategy was really 21 focused on going after indications which will be rapid to market, which would demonstrate the superior advantage ofthe compound 22 in terms of its fast speed of action and would provide a low-risk regulatory path for approval Now that we've got those programs 23 obviously well underway, we plan to turn our attention to DVT, stroke, [and] other indications to really exploit the full commercial 24 potential and the full medical benefit of the product.
25 1. Reasons Why Defendants' January 5, 2006 Statements Were False and Misleading 26 95. The statements in the January 5, 2006 press release and conference call that 27 alfimeprase "has been shown in clinical studies to provide rapid clot dissolution, that the Phase 2 28
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1 data "suggest[s] a dramatic feat of action and "fast speed of action that "will be demonstrated in
2 Phase 3, that the Phase 3 trials therefore represented a "low risk regulatory path for approval, and
3 that alfimeprase "has blockbuster potential and "will be rapid to market for PAO and CO, were
4 false because the Phase 2 data was not as reliable or significant as defendants had led the market to
5 believe, nor were the existing risks to FDA Approval or commercial marketability ofalfimeprase for
6 PAO and CO fully disclosed.
7 96. As alleged previously, defendants knew that blood flow in some patients enrolled in
8 the NAPA PAO trials would be restored simply by inserting the catheter into the clot to deliver the
9 drug, rather than through any action of alfimeprase, and had no basis for representing to the market
10 the degree to which the drug caused the purportedly successful Phase 2 results. Based on the small
11 size of the CO Phase 2 trial, preclinical studies which showed greater efficacy at higher doses and
12 the lower than expected rate of catheter clearance in the comparator alteplase arm, defendants also
13 had no reasonable basis for predicting success in the Phase 3 trials for CO, because they did not
14 know whether the dose of alfimeprase chosen for the study in SONOMA-2 would yield the required
15 results or would be appropriate for the commercial success of alfimeprase in this indication. As a
16 result, the regulatory path for approval for CO was far from "low risk, nor was there a "high
17 probability of success in the Phase 3 PAO and CO trials, as defendants had previously represented.
18 97. These statements, together with defendants' other statements regarding the purported
19 success of the Phase 2 trials and the likelihood of success in the Phase 3 trials as elsewhere alleged,
20 were also materially false and misleading to investors because Nuvelo omitted to disclose, in the
21 press release, on the conference call, or elsewhere, known risks that reduced the likelihood that the
22 Phase 2 results could be replicated in Phase 3 trials, that the Phase 3 trials would succeed or that the
23 drug would be marketable, including that: (i) in the Phase 2 PAO trial the clot may have simply been
24 broken up by the action of the catheter pushing into the clot, rather than dissolved by the action of
25 the drug, a possibility that had been raised internally at Nuvelo even before the Phase 2 PAO trials
26 were completed; (ii) in the Phase 3 CO trial, Nuvelo had agreed with the FDA to demonstrate
27 success at a statistical significance level that was forty times more stringent than what the market
28 believed, rendering success much less likely; (iii) the market opportunity for the drug in PAO was
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1 much smaller than represented to analysts and the market because of competition from off-label use
2 of other drugs and mechanical clot-busting techniques, the potential impact ofwhich was not timely
3 or accurately disclosed to investors; (iv) Nuvelo had an undisclosed "target product profile which
4 would be necessary to meet in order for the Company to market alfimeprase for CO, and the
5 Company would not proceed to market alfimeprase for that indication ifthe trial results did not meet
6 that profile, even if the drug was otherwise qualified for FDA approval.
7 2. Scienter
8 98. The following facts, as alleged in more detail elsewhere in the Complaint, give rise to
9 a cogent inference which is stronger than any non-culpable inferences, that each of the defendants
10 knew or was deliberately reckless in not knowing that the foregoing statements in the January 5,
11 2006 press release and conference call were materially false and misleading when made:
12 (a) Defendants Love, as Chairman and CEO, Titus, as CAO, and Levy as Senior
13 VP of Research and Development, were responsible for and/or knew about the clinical testing of
14 alfimeprase, the agreements with the FDA about the required p-value for SONOMA-2 and the target
15 product profile for marketing alfimeprase for CO. They were responsible for the reports and claims
16 relating to alfimeprase as well as the press releases issued by the Company. Specifically, defendants
17 were privy to the facts surrounding the results ofthe alfimeprase Phase 2 CO and PAO trials and the
18 specific facts surrounding the design of the alfimeprase Phase 3 CO and PAO trials, including the
19 requirements imposed by the FDA on SONOMA-2 (the alfimeprase Phase 3 CO trial).
20 (b) According to CW 1, defendant Love wrote the protocols for all ofthe clinical
21 trials of alfimeprase, including the protocol for SONOMA-2, and was a member ofthe "alfimeprase
22 team consisting of people primarily responsible for the testing and marketing of the drug.
23 Therefore, he had actual knowledge of the extremely stringent p-value of 0.00125 which the FDA
24 imposed on the SONOMA-2 trial and the "target product profile for marketing alfimeprase for CO.
25 (c) As they admitted first on December 11, 2006 and in more detail on June 26,
26 2007, defendants knew that the FDA had imposed an extremely stringent p-value requirement ofless
27 than 0.00125 for the alfimeprase Phase 3 CO trial (SONOMA-2), which was forty times less than the
28
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1 standard p-value of 0.05, and that, because of the stringent p-value imposed by the FDA, success in
2 the Phase 3 trial and FDA approval were unlikely.
3 (d) Defendants knew or recklessly disregarded that the action ofcatheter insertion
4 can restore blood flow where there was a clot. This precise risk had been raised by CW1 prior to the
5 Class Period with high ranking officers of Nuvelo, including Love, Pena and Deitcher. Thus,
6 defendants knew that the results obtained in the Phase 2 trial of alfimeprase for PAO could have
7 been the result, in whole or in part, ofthe insertion ofthe catheter used to administer the alfimeprase,
8 rather than the action of the alfimeprase. The insertion ofthe catheter alone could have restored the
9 blood flow resulting in patients not requiring open surgery within 30 days. Thus, defendants knew or
10 recklessly disregarded that the Phase 2 trial of alfimeprase for PAO did not produce reliable results
11 that would accurately predict the success of alfimeprase in the Phase 3 trial or FDA approval, or that
12 would indicate there would be a "low risk path to FDA approval or "rapid path to the marketability
13 of the drug for PAO.
14 (e) Defendants knew or recklessly disregarded that their "power calculations
15 were not reliable because they were based upon placebo assumptions which had no reasonable basis.
16 Defendants did not know how many patients avoided open surgery for 30 days as a result of the
17 action ofthe catheter breaking up the clot in the Phase 2 PAO trial, and thus, had no reasonable basis
18 for assuming how many patients in the placebo arm would avoid open surgery because their clots
19 were broken up simply by the insertion of the catheter. According to defendants, these power
20 calculations were based on assumptions about the percentage ofclots dissolved in the placebo group,
21 without regard to the fact that blood flow is restored by disruption of a clot, even if it is not
22 dissolved, and restoration of blood flow avoids surgery.
23 (f) Because of Love's and Nuvelo's VP of Manufacturing's involvement with
24 alteplase while employed by Genentech, defendants knew or recklessly disregarded that the market
25 opportunity for alfimeprase for PAO was much smaller than represented to analysts and the market
26 because of competition from off-label use of other drugs and mechanical clot-busting techniques and
27 devices.
28
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1 (g) Defendants knew that Nuvelo had an undisclosed "target product profile
2 which would be necessary to meet for the marketability and commercial success of alfimeprase in
3 CO, and that the Company would not proceed to market alfimeprase for that indication if the
4 SONOMA-2 trial results did not meet that profile, even ifthe drug was otherwise qualified for FDA
5 approval.
6 (h) Because defendants Love and Titus signed Nuvelo's filings with the SEC
7 during the Class Period, they knew or recklessly disregarded that Nuvelo had not disclosed known
8 material risks to the success of the Phase 3 trials, FDA approval and the commercial potential of
9 alfimeprase, as detailed herein in ¶1131-144.
10 99. The totality of these circumstances, in addition to facts alleged elsewhere in this
11 Complaint, give rise to a cogent inference which is stronger than any non-culpable inferences that
12 each of the defendants had actual knowledge or recklessly disregarded that their January 5, 2006
13 statements were materially false and misleading when made.
14 B. Defendants ' February 27, 2006 False and Misleading Statements
15 100. On February 27, 2006, the Company and Bayer issued a press release entitled
16 "Nuvelo and Bayer HealthCare Begin SONOMA-3, Second Phase 3 Trial ofAlfimeprase in Patients
17 With Central Venous Catheter Occlusion, which stated in relevant part:
18 Nuvelo Inc. (Nasdaq: NUVO) and Bayer HealthCare (BHC) today announced that they have begun patient enrollment in a second 19 pivotal Phase 3 clinical trial of lead product candidate, alfimeprase, for the treatment of central venous catheter occlusion (CO). 20
21 `We believe that alfimeprase has the potential to quickly dissolve 22 clots and rapidly restore the ability to infuse critical therapy such as chemotherapy or antibiotics through once occluded catheters,' said 23 Steven R. Deitcher, M.D., vice president of medical sciences for Nuvelo and former principal investigator of the Phase 2 trial. `We 24 look forward to completing the first trial in this program, SONOMA- 2, later this year and expect the Phase 3 trial results to confirm the 25 ability ofalfimeprase to restorefunction to occluded catheters in 15 minutes or less, as demonstrated in our Phase 2 trial.' 26 Previously announced results from a Phase 2 multi-center, 27 randomized, double-blind study in 55 patients with occluded central venous catheters demonstrated that alfimeprase restoredflow to 40 28 percent and 50percent ofoccluded catheters 5 and 15 minutes after
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the first dose, respectively. By comparison, Cathflo(R)Activase(R) (alteplase) did not restore flow at either time point. Alfimeprase also 2 restored flow to 60 percent of occluded catheters at 120 minutes after the first dose and to 80 percent of occluded catheters at 120 minutes 3 after the second dose compared with 46 percent at 120 minutes after the first dose and 62 percent at 120 minutes after the second dose 4 with Cathflo(R)Activase(R).
5 101. On February 27, 2006, Nuvelo conducted a conference call with analysts to discuss
6 the Company's FY05 and 4Q05 results. Defendants Love, Titus and Levy each participated in and
7 spoke on behalf of Nuvelo during the call. On the call, Levy and Love provided the following
8 update on the status of the alfimeprase trials:
9 [Levy]: [I]n January of this year, the FDA granted alfimeprase fast track designation. This designation is reserved for drugs that 10 demonstrate the potential to address an unmet medical need and are intended for the treatment of a serious or life-threatening condition. 11 In the case of acute PAO, there is no currently available FDA approved drug making it an unmet medical need and the Phase 2 12 datafor alfimeprase has demonstrated that it has a realpotential to transform the treatment of this condition. 13
14 Having made progress on our initial clinical programs in 2006 we 15 will begin to implement our label expansion strategy for alfimeprase. We have always known that alfimeprase holds thepotential to treat 16 a wide range of clot disorders and that acute PAO and catheter occlusion represented the most rapid and low risk market entry 17 strategy for us. Now that we've advanced both of these initial programs, we are able to pursue follow-on opportunities for 18 alfimeprase being ischemic stroke and NDBT. We believe that alfimeprase has the potential to transform both of these markets 19 where currently there is little penetration by existing agents.
20
21 [Love] : Our partnership with Bayer is predicated on a belief that alfimeprase has the potential to transform treatmentfor the more 22 than 10 million people in the western world who sufferfrom blood clot related conditions each year and that the market opportunity 23 extends far beyond acute PAO and catheter occlusion... .
24 After our announcement with Bayer in January, we have moved swiftly to kick off the partnership. We are off to a great start and 25 have been working to establish the appropriate joint committees between our companies. In other words, we've already started to put 26 a solid foundation in place for our very successful collaboration and we continue to make excellent progress with alfimeprase 27 development.
28
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1 1. Reasons Why Defendants' February 27, 2006 Statements Were False and Misleading 2 102. The statements in the February 27, 2006 press release and the February 27, 2006 3 conference call that Nuvelo expected the Phase 3 trials to "confirm the ability of alfimeprase to 4 restore function to occluded catheters, as "demonstrated' in the Phase 2 trial, and that "acute PAO 5 and catheter occlusion represented the most rapid and low risk market entry strategy for the 6 Company, were false because the Phase 2 data was not as reliable or significant as defendants had 7 led the market to believe, nor were the existing risks to FDA Approval or commercial marketability 8 of alfimeprase for PAO and CO fully disclosed. 9 103. As alleged previously, defendants knew that blood flow in some patients enrolled in 10 the NAPA PAO trials would be restored simply by inserting the catheter into the clot to deliver the 11 drug, rather than through any action of alfimeprase, and had no basis for representing to the market 12 the degree to which the drug caused the purportedly successful Phase 2 results. Based on the small 13 size ofthe CO Phase 2 trial and the lower than expected rate of catheter clearance in the comparator 14 alteplase arm, defendants also had no reasonable basis for predicting success in the Phase 3 trials for 15 CO, because they did not know whether the dose ofalfimeprase chosen for the study in SONOMA-2 16 would yield the required results or would be appropriate for the commercial success of alfimeprase 17 in this indication. As a result, the regulatory path for approval for CO was far from "low risk, nor 18 was there a "high probability of success in the Phase 3 PAO and CO trials, as defendants had 19 previously represented. 20 104. These statements, together with defendants' other statements regarding the purported 21 success of the Phase 2 trials and the likelihood of success in the Phase 3 trials as elsewhere alleged, 22 were also materially false and misleading to investors because Nuvelo omitted to disclose, in the 23 press release, on the conference call, or elsewhere, known risks that reduced the likelihood that the 24 Phase 2 results could be replicated in Phase 3 trials, that the Phase 3 trials would succeed or that the 25 drug would be marketable, including that: (i) in the Phase 2 PAO trial, the blood clot may have 26 simply been broken up by the action ofthe catheter pushing into the clot, rather than dissolved by the 27 action of the drug, a possibility that had been raised internally at Nuvelo even before the Phase 2 28
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1 PAO trials were completed; (ii) in the Phase 3 CO trial, Nuvelo had agreed with the FDA to
2 demonstrate success at a statistical significance level that wasforty times more stringent than what
3 the market believed, rendering success much less likely; (iii) the market opportunity for the drug in
4 PAO was much smaller than represented to analysts and the market because ofcompetition from off-
5 label use of other drugs and mechanical clot-busting techniques, the potential impact of which was
6 not timely or accurately disclosed to investors; (iv) Nuvelo had an undisclosed "target product
7 profile which would be necessary to meet in order for the Company to market alfimeprase for CO,
8 and the Company would not proceed to market alfimeprase for that indication if the trial results did
9 not meet that profile, even if the drug was otherwise qualified for FDA approval.
10 2. Scienter
11 105. The following facts, as alleged in more detail elsewhere in the Complaint, give rise to
12 a cogent inference which is stronger than any non-culpable inferences, that each of the defendants
13 knew or was deliberately reckless in not knowing that the foregoing statements in the February 27,
14 2006 press release and conference call were materially false and misleading when made:
15 (a) Defendants Love, as Chairman and CEO, Titus, as CAO, and Levy as Senior
16 VP of Research and Development, were responsible for and/or knew about the clinical testing of
17 alfimeprase, the agreements with the FDA about the required p-value for SONOMA-2 and the target
18 product profile for marketing alfimeprase for CO. They were responsible for the reports and claims
19 relating to alfimeprase as well as the press releases issued by the Company. Specifically, defendants
20 were privy to the facts surrounding the results ofthe alfimeprase Phase 2 CO and PAO trials and the
21 specific facts surrounding the design of the alfimeprase Phase 3 CO and PAO trials, including the
22 requirements imposed by the FDA on SONOMA-2 (the alfimeprase Phase 3 CO trial).
23 (b) According to CW 1, defendant Love wrote the protocols for all ofthe clinical
24 trials of alfimeprase, including the protocol for SONOMA-2, and was a member ofthe "alfimeprase
25 team consisting of people primarily responsible for the testing and marketing of the drug.
26 Therefore, he had actual knowledge of the extremely stringent p-value of less than 0.00125 which
27 the FDA imposed on the SONOMA-2 trial and the "target product profile for marketing
28 alfimeprase for CO.
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1 (c) As they admitted first on December 11, 2006 and in more detail on June 26,
2 2007, defendants knew that the FDA had imposed an extremely stringent p-value requirement ofless
3 than 0.00125 for the alfimeprase Phase 3 CO trial (SONOMA-2), which was forty times less than the
4 standard p-value of 0.05, and that, because of the stringent p-value imposed by the FDA, success in
5 the Phase 3 trial and FDA approval were unlikely.
6 (d) Defendants knew or recklessly disregarded that the action ofcatheter insertion
7 can restore blood flow where there was a clot. This precise risk had been raised by CW1 prior to the
8 Class Period with high ranking officers of Nuvelo, including Love, Pena and Deitcher. Thus,
9 defendants knew that the results obtained in the Phase 2 trial of alfimeprase for PAO could have
10 been the result, in whole or in part, ofthe insertion ofthe catheter used to administer the alfimeprase,
11 rather than the action of the alfimeprase. The insertion ofthe catheter alone could have restored the
12 blood flow resulting in patients not requiring open surgery within 30 days. Thus, defendants knew or
13 recklessly disregarded that the Phase 2 trial of alfimeprase for PAO did not produce reliable results
14 that would predict the success of alfimeprase in the Phase 3 trial or FDA approval, or that would
15 indicate there would be a "low risk path to FDA approval or "rapid path to the marketability ofthe
16 drug for PAO.
17 (e) Defendants knew or recklessly disregarded that their "power calculations
18 were not reliable because they were based upon placebo assumptions which had no reasonable basis.
19 Defendants did not know how many patients avoided open surgery for 30 days as a result of the
20 action ofthe catheter breaking up the clot in the Phase 2 PAO trial, and thus, had no reasonable basis
21 for assuming how many patients in the placebo arm would avoid open surgery because their clots
22 were broken up simply by the insertion of the catheter. According to defendants, these power
23 calculations were based on assumptions about the percentage ofclots dissolved in the placebo group,
24 without regard to the fact that blood flow is restored by disruption of a clot, even if it is not
25 dissolved, and restoration of blood flow avoids surgery.
26 (f) Because of Love's and Nuvelo's VP of Manufacturing's involvement with
27 alteplase while employed by Genentech, defendants knew or recklessly disregarded that the market
28 opportunity for alfimeprase for PAO was much smaller than represented to analysts and the market
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because of competition from off-label use of other drugs and mechanical clot-busting techniques and
2 devices.
3 (g) Defendants knew that Nuvelo had an undisclosed "target product profile
4 which would be necessary to meet for the marketability and commercial success of alfimeprase in
5 CO, and that the Company would not proceed to market alfimeprase for that indication if the
6 SONOMA-2 trial results did not meet that profile, even ifthe drug was otherwise qualified for FDA
7 approval.
8 (h) Because defendants Love and Titus signed Nuvelo's filings with the SEC
9 during the Class Period, they knew or recklessly disregarded that Nuvelo had not disclosed known
10 material risks to the success of the Phase 3 trials, FDA approval and the commercial potential of
11 alfimeprase, as detailed herein in ¶1131-144.
12 106. The totality of these circumstances, in addition to facts alleged elsewhere in this
13 Complaint, give rise to a cogent inference which is stronger than any non-culpable inferences that
14 each of the defendants had actual knowledge or recklessly disregarded that their February 27, 2006
15 statements were materially false and misleading when made.
16 C. Misleading Statements in Nuvelo's FY05 Report on Form 10-K
17 107. On March 15, 2006, Nuvelo filed with the SEC its Report on Form 10-K for its 2005
18 fiscal year, ending December 31, 2005, signed by defendants Titus and Love.
19 108. Regarding the Phase 2 clinical trials of alfimeprase, the 10-K Report stated:
20 We completed our Phase 2 clinical trial in patients with acute PAO in the second quarter of 2004. This trial was an open label, dose-escalation study evaluating the 21 safety and activity of alfimeprase. The trial enrolled 113 patients in multiple centers in the United States, Europe, Russia and other locations. The Phase 2 results 22 indicate that alfimeprase has thepotential to offer significant advances in the rapid resolution of a blood clot while minimizing potentially fatal side effects such as 23 intracerebral hemorrhage and other bleeding complications. Analysis ofthe Phase 2 results showed that alfimeprase has thepotential topartially or completely break 24 up blood clots within four hours of initiation of dosing with rates of up to 76 percent and to restore arterialfZow with rates ofup to 60percent Up to 69percent 25 ofstudypatients were able to avoid open vascular surgical intervention in the 30 daysfollowing treatment with alfimeprase. Among the 113patients enrolled, there 26 were no intracerebral hemorrhages or deaths at 30 days. There were seven major bleeding events reported, none ofwhich was categorized as systemic bleeding events 27 and only one of which was categorized by the investigator as possibly related to alfimeprase. Incidents of transient hypotension were also reported and were dose- 28 related. Events associated with distal embolism were also noted. We do not believe
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that these events were more significant in number or severity than similar events associated with other therapies delivered by catheter to blood clots. 2
3 In the third quarter of 2004, we completed patient enrollment in a Phase 2 multi- 4 center, double-blind, randomized study in 55 patients with occluded central venous catheters comparing three doses (0.3 mg, 1.0 mg and 3.0 mg) of alfimeprase against 5 the approved dose of Cathflo Activase (2.0 mg). The alfimeprase 3.0 mg dose produced cumulativeflow rates of40percent atfive minutes after thefirst dose, 50 6 percent at 15 minutes after thefirst dose, 60percent at 30 minutes and 120 minutes after the first dose, and 80 percent at 120 minutes after the second dose. This is 7 compared to Cathflo Activase, which producedflow rates ofzero percent atfive minutes after the first dose, zero percent at 15 minutes after the first dose, 23 8 percent at 30 minutes after thefirst dose, 46percent at 120 minutes after thefirst dose, and 62 percent at 120 minutes after the second dose. No major hemorrhagic 9 events were reported in any treated patients and only one patient had a catheter- related infection. 10 109. A letter to shareholders accompanying Nuvelo's 2005 Annual Report to Shareholders 11 signed by Love, similarly stated: 12 Alfimeprase is being developed as a clot dissolver and has the potential to 13 fundamentally change the treatment ofa wide range ofclot related disorders. We chose our initial clinical programs for alfimeprase in acute peripheral arterial 14 occlusion (PAO) and catheter occlusion (CO), topermit more rapid and lower risk market entry, with the expectation that we would later expand our efforts into 15 additional indications. We are well on our way to achieving this goal
16
17 Given alfimeprase's speed ofaction and safetyprofile, we believe it could offer a superior alternative to currently available therapies in these large and undeserved 18 markets. We expect to initiate a Phase 2 trial with alfimeprase in stroke in the second half of 2006 and a Phase 2 trial in DVT in 2007. 19 110. The Report on Form 10-K did not include any specific warnings about the known 20 risks of the applicability of the Phase 2 results to the ongoing Phase 3 trials, the likelihood of FDA 21 approval in view ofthe FDA's extremely stringent p-value requirements for the Phase 3 CO trial and 22 the undisclosed target product profile for the marketability of the drug for CO. 23 1. Reasons Why the Statements in the FY05 Report on Form 10- 24 K Were Materially False and Misleading to Investors.
25 111. The statements in the Report on Form 10-K and accompanying shareholder letter that
26 the Phase 2 results for PAO indicate alfimeprase's ability to "offer significant advances in the rapid
27 resolution of [] blood clot[s] and that it "has the potential to partially or completely break up blood
28 clots within four hours, were false and misleading because the Phase 2 data was not as reliable or
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1 significant as defendants had led the market to believe, nor were the existing risks to FDA Approval
2 or commercial marketability of alfimeprase for PAO and CO fully disclosed.
3 112. As alleged previously, defendants knew that blood flow in some patients enrolled in
4 the NAPA PAO trials would be restore simply by inserting the catheter into the clot to deliver the
5 drug, rather than through any action of alfimeprase, and had no basis for representing to the market
6 the degree to which the drug caused the purportedly successful Phase 2 results . Based on the small
7 size ofthe CO Phase 2 trial and the lower than expected rate of catheter clearance in the comparator
8 alteplase arm, defendants also had no reasonable basis for predicting success in the Phase 3 trials for
9 CO, because they did not know whether the dose ofalfimeprase chosen for the study in SONOMA-2
10 would yield the required results or would be appropriate for the commercial success of alfimeprase
11 in this indication. As a result, the regulatory path for approval for CO was far from "low risk, nor
12 was there a "high probability of success in the Phase 3 PAO and CO trials , as defendants had
13 previously represented.
14 113. These statements, together with defendants' other statements regarding the purported
15 success of the Phase 2 trials and the likelihood of success in the Phase 3 trials as elsewhere alleged,
16 were also materially false and misleading to investors because Nuvelo omitted to disclose, in the
17 press release, on the conference call, or elsewhere, known risks that reduced the likelihood that the
18 Phase 2 results could be replicated in Phase 3 trials, that the Phase 3 trials would succeed or that the
19 drug would be marketable, including that: (i) in the Phase 2 PAO trial, the blood clot may have
20 simply been broken up by the action ofthe catheter pushing into the clot, rather than dissolved by the
21 action of the drug, a possibility that had been raised internally at Nuvelo even before the Phase 2
22 PAO trials were completed; (ii) in the Phase 3 CO trial, Nuvelo had agreed with the FDA to
23 demonstrate success at a statistical significance level that wasforty times more stringent than what
24 the market believed, rendering success much less likely; (iii) the market opportunity for the drug in
25 PAO was much smaller than represented to analysts and the market because ofcompetition from off-
26 label use of other drugs and mechanical clot-busting techniques, the potential impact of which was
27 not timely or accurately disclosed to investors; (iv) Nuvelo had an undisclosed "target product
28 profile which would be necessary to meet in order for the Company to market alfimeprase for CO,
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1 and the Company would not proceed to market alfimeprase for that indication if the trial results did
2 not meet that profile, even if the drug was otherwise qualified for FDA approval.
3 2. Scienter
4 114. The following facts, as alleged in more detail elsewhere in the Complaint, give rise to
5 a cogent inference which is stronger than any non-culpable inferences, that each of the defendants
6 knew or was deliberately reckless in not knowing that the statements in the FY05 Report on Form
7 10-K were materially false and misleading when made:
8 (a) Defendants Love, as Chairman and CEO, Titus, as CAO and Levy as Senior
9 VP of Research and Development, were responsible for and/or knew about the clinical testing of
10 alfimeprase, the agreements with the FDA about the required p-value for SONOMA-2 and the target
11 product profile for marketing alfimeprase for CO. They were responsible for the reports and claims
12 relating to alfimeprase as well as the press releases issued by the Company. Specifically, defendants
13 were privy to the facts surrounding the results ofthe alfimeprase Phase 2 CO and PAO trials and the
14 specific facts surrounding the design of the alfimeprase Phase 3 CO and PAO trials, including the
15 requirements imposed by the FDA on SONOMA-2 (the alfimeprase Phase 3 CO trial).
16 (b) According to CW 1, defendant Love wrote the protocols for all ofthe clinical
17 trials of alfimeprase, including the protocol for SONOMA-2, and was a member ofthe "alfimeprase
18 team consisting of people primarily responsible for the testing and marketing of the drug.
19 Therefore, he had actual knowledge of the extremely stringent p-value of less than 0.00125 which
20 the FDA imposed on the SONOMA-2 trial and the "target product profile for marketing
21 alfimeprase for CO.
22 (c) As they admitted first on December 11, 2006 and in more detail on June 26,
23 2007, defendants knew that the FDA had imposed an extremely stringent p-value requirement ofless
24 than 0.00125 for the alfimeprase Phase 3 CO trial (SONOMA-2), which was forty times less than the
25 standard p-value of 0.05, and that, because of the stringent p-value imposed by the FDA, success in
26 the Phase 3 trial and FDA approval were unlikely.
27 (d) Defendants knew or recklessly disregarded that the action ofcatheter insertion
28 can restore blood flow where there was a clot. This precise risk had been raised by CW1 prior to the
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1 Class Period with high ranking officers of Nuvelo, including Love, Pena and Deitcher. Thus,
2 defendants knew that the results obtained in the Phase 2 trial of alfimeprase for PAO could have
3 been the result, in whole or in part, ofthe insertion ofthe catheter used to administer the alfimeprase,
4 rather than the action of the alfimeprase. The insertion ofthe catheter alone could have restored the
5 blood flow resulting in patients not requiring open surgery within 30 days. Thus, defendants knew or
6 recklessly disregarded that the Phase 2 trial of alfimeprase for PAO did not produce reliable results
7 that would predict the success of alfimeprase in the Phase 3 trial or FDA approval, or that would
8 indicate there would be a "low risk path to FDA approval or "rapid path to the marketability ofthe
9 drug for PAO.
10 (e) Defendants knew or recklessly disregarded that their "power calculations
11 were not reliable because they were based upon placebo assumptions which had no reasonable basis.
12 Defendants did not know how many patients avoided open surgery for 30 days as a result of the
13 action ofthe catheter breaking up the clot in the Phase 2 PAO trial, and thus, had no reasonable basis
14 for assuming how many patients in the placebo arm would avoid open surgery because their clots
15 were broken up simply by the insertion of the catheter. According to defendants, these power
16 calculations were based on assumptions about the percentage ofclots dissolved in the placebo group,
17 without regard to the fact that blood flow is restored by disruption of a clot, even if it is not
18 dissolved, and restoration of blood flow avoids surgery.
19 (f) Because of Love's and Nuvelo's VP of Manufacturing's involvement with
20 alteplase while employed by Genentech, defendants knew or recklessly disregarded that the market
21 opportunity for alfimeprase for PAO was much smaller than represented to analysts and the market
22 because of competition from off-label use of other drugs and mechanical clot-busting techniques and
23 devices.
24 (g) Defendants knew that Nuvelo had an undisclosed "target product profile
25 which would be necessary to meet for the marketability and commercial success of alfimeprase in
26 CO, and that the Company would not proceed to market alfimeprase for that indication if the
27 SONOMA-2 trial results did not meet that profile, even ifthe drug was otherwise qualified for FDA
28 approval.
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(h) Because defendants Love and Titus signed Nuvelo's filings with the SEC
2 during the Class Period, they knew or recklessly disregarded that Nuvelo had not disclosed known
3 material risks to the success of the Phase 3 trials, FDA approval and the commercial potential of
4 alfimeprase, as detailed herein in ¶1131-144.
5 115. The totality of these circumstances, in addition to facts alleged elsewhere in this
6 Complaint, give rise to a cogent inference which is stronger than any non-culpable inferences that
7 each of the defendants had actual knowledge or recklessly disregarded that the statements in the
8 FY05 Report on Form 10-K and the letter to shareholders accompanying Nuvelo's 2005 Annual
9 Report to Shareholders were materially false and misleading when made.
10 D. Defendants' False and Misleading Statements in April 10, 2006 Press Release 11 116. On April 10, 2006, defendants, along with Bayer, issued a press release entitled 12 "Nuvelo and Bayer Healthcare Begin NAPA-3, Second Pivotal Phase 3 Trial of Alfimeprase for 13 Acute Peripheral Arterial Occlusion, which announced the commencement ofthe NAPA 2 trial, and 14 then stated, in relevant part: 15 Previously announced results from the NAPA-1 trial, a Phase 2 16 dose- escalation study, demonstrated that alfimeprase can restore arterial bloodflow within four hours ofinitiation ofdosing, has a 17 favorable safety profile with minimal bleeding complications, and resulted in a majority ofpatients avoiding open vascular surgery 18 within 30 days oftreatment.
19 1. Reasons Why Defendants' April 10, 2006 Statement Was False and Misleading 20 117. The statement in the April 10, 2006 press release that the Phase 2 study in PAO had 21 "demonstrated that alfimeprase can restore arterial blood flow within four hours of initiation of 22 dosing was false because in fact, blood flow in the patients enrolled in the NAPA PAO trials had 23 been restored simply by inserting the catheter into the clot to deliver the drug, rather than through 24 any action of alfimeprase. The statement, together with defendants' other statements regarding the 25 purported success ofthe Phase 2 trials and the likelihood of success in the Phase 3 trials as elsewhere 26 alleged, were also materially false and misleading to investors because Nuvelo omitted to disclose in 27 the press release, or elsewhere, known risks that reduced the likelihood that the Phase 2 results could 28
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1 be replicated in Phase 3 trials, that the Phase 3 trials would succeed or that the drug would be
2 marketable, including that: (i) in the Phase 2 PAO trial, the blood clot may have simply been broken
3 up by the action of the catheter pushing into the clot, rather than dissolved by the action of the drug,
4 a possibility that had been raised internally at Nuvelo even before the Phase 2 PAO trials were
5 completed; and (ii) the market opportunity for the drug in PAO was much smaller than represented
6 to analysts and the market because of competition from off-label use of other drugs and mechanical
7 clot-busting techniques, the potential impact of which was not timely or accurately disclosed to
8 investors.
9 2. Scienter
10 118. The following facts, as alleged in more detail elsewhere in the Complaint, give rise to
11 a cogent inference which is stronger than any non-culpable inferences, that each of the defendants
12 knew or was deliberately reckless in not knowing that the foregoing statement in the April 10, 2006
13 press release was materially false and misleading when made:
14 (a) Defendants Love, as Chairman and CEO, Titus, as CAO, and Levy as Senior
15 VP of Research and Development, were responsible for and/or knew about the clinical testing of
16 alfimeprase. They were responsible for the reports and claims relating to alfimeprase as well as the
17 press releases issued by the Company. Specifically , defendants were privy to the facts surrounding
18 the results of the alfimeprase Phase 2 CO and PAO trials and the specific facts surrounding the
19 design of the alfimeprase Phase 3 CO and PAO trials.
20 (b) According to CW 1, defendant Love wrote the protocols for all ofthe clinical
21 trials of alfimeprase and was a member of the "alfimeprase team consisting of people primarily
22 responsible for the testing and marketing of the drug.
23 (c) Defendants knew or recklessly disregarded that the action ofcatheter insertion
24 can restore blood flow where there was a clot. This precise risk had been raised by CW 1 prior to the
25 Class Period with high ranking officers of Nuvelo, including Love, Pena and Deitcher. Thus,
26 defendants knew that the results obtained in the Phase 2 trial of alfimeprase for PAO could have
27 been the result, in whole or in part, ofthe insertion of the catheter used to administer the alfimeprase,
28 rather than the action of the alfimeprase . The insertion ofthe catheter alone could have restored the
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1 blood flow resulting in patients not requiring open surgery within 30 days. Thus, defendants knew or
2 recklessly disregarded that the Phase 2 trial of alfimeprase for PAO did not produce reliable results
3 that would predict the success of alfimeprase in the Phase 3 trial or FDA approval, or that would
4 indicate there would be a "low risk path to FDA approval or "rapid path to the marketability ofthe
5 drug for PAO.
6 (d) Defendants knew or recklessly disregarded that their "power calculations
7 were not reliable because they were based upon placebo assumptions which had no reasonable basis.
8 Defendants did not know how many patients avoided open surgery for 30 days as a result of the
9 action ofthe catheter breaking up the clot in the Phase 2 PAO trial, and thus, had no reasonable basis
10 for assuming how many patients in the placebo arm would avoid open surgery because their clots
11 were broken up simply by the insertion of the catheter. According to defendants, these power
12 calculations were based on assumptions about the percentage ofclots dissolved in the placebo group,
13 without regard to the fact that blood flow is restored by disruption of a clot, even if it is not
14 dissolved, and restoration of blood flow avoids surgery.
15 (e) Because of Love's and Nuvelo's VP of Manufacturing's involvement with
16 alteplase while employed by Genentech, defendants knew or recklessly disregarded that the market
17 opportunity for alfimeprase for PAO was much smaller than represented to analysts and the market
18 because of competition from off-label use of other drugs and mechanical clot-busting techniques and
19 devices. According to defendants these power calculators were based on assumptions about the
20 percentage of clots dissolved in the placebo group, without regard to the fact that blood flow is
21 restored with disruption of a clot that is not dissolved, and restoration ofblood flow avoids surgery.
22 (f) Because defendants Love and Titus signed Nuvelo's filings with the SEC
23 during the Class Period, they knew or recklessly disregarded that Nuvelo had not disclosed known
24 material risks to the success of the Phase 3 trials, FDA approval and the commercial potential of
25 alfimeprase, as detailed herein in ¶1131-144.
26 119. The totality of these circumstances, in addition to facts alleged elsewhere in this
27 Complaint, give rise to a cogent inference which is stronger than any non-culpable inferences that
28
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each of the defendants had actual knowledge or recklessly disregarded that their April 10, 2006
2 statement was materially false and misleading when made.
3 E. Defendants ' May 5, 2006 False and Misleading Statements
4 120. On May 5, 2006, Nuvelo conducted a conference call with analysts to discuss the
5 Company's 1 Q06 results . Defendants Love, Titus and Levy each participated in and spoke on behalf
6 ofNuvelo during the call. During the call, defendants made the following statements in response to
7 questions from analysts regarding the ongoing NAPA trials for PAO:
8 [Love]: So you asked two questions. I'll answer the statistical one first. Yes, we took a very conservative case when we prepared the 9 trial. Obviously in an ideal world, everyone who received placebo wouldn't respond to therapy and require surgery, and the vast 10 components of people who received alfimeprase would respond[.] But we took a conservative case scenario and allowedfor a certain 11 percentage ofpatients to be deemed to respond to placebo; and as we've discussed in past conferences in particular, the statistical 12 power is still overwhelming for this trial, and we have 90% [INAUDIBLE], 22% difference in the ultimate rate between the two 13 therapies, placebo and alfimeprase.
14
15 [Titus]:... [W]e believe that the prudent case to plan for is two trials for approval. That's typically what's required by the FDA. And 16 really the driver here is not the statistical power for approving efficacy, because we believe that can be done with a relatively small 17 patient sample; but we need to generate a reasonable size patient safety database to seek approval. So that's certainly the way we're 18 planning.
19
20 [WJe believe we still have overwhelming statisticalpower to detect the difference between and active therapy such as alfimeprase - 21 which is indeed very active based on our Phase 2 studies to date - andplacebo. 22 1. Reasons Why Defendants' May 5, 2006 Statements Were False 23 and Misleading
24 121. The statements by Love and Titus on the May 5, 2006 conference call that the Phase 3
25 NAPA trials for PAO were "conservatively designed with "overwhelming statistical power to
26 detect differences between alfimeprase- and placebo-caused results, and that "the driver here is not
27 the statistical power for efficacy because the drug was "indeed very active based on our Phase 2
28 studies, were false because in fact, blood flow in the patients enrolled in the NAPA PAO trials had
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1 been restored simply by inserting the catheter into the clot to deliver the drug, rather than through
2 any action of alfimeprase. These statements, together with defendants' other statements regarding
3 the purported success of the Phase 2 trials and the likelihood of success in the Phase 3 trials as
4 elsewhere alleged, were also materially false and misleading to investors because Nuvelo omitted to
5 disclose, on the conference call, or elsewhere, known risks that reduced the likelihood that the
6 Phase 2 results could be replicated in Phase 3 trials, that the Phase 3 trials would succeed or that the
7 drug would be marketable, including that: (i) in the Phase 2 PAO trial, the blood clot may have
8 simply been broken up by the action ofthe catheter pushing into the clot, rather than dissolved by the
9 action of the drug, a possibility that had been raised internally at Nuvelo even before the Phase 2
10 PAO trials were completed; and (ii) the market opportunity for the drug in PAO was much smaller
11 than represented to analysts and the market because of competition from off-label use ofother drugs
12 and mechanical clot-busting techniques, the potential impact of which was not timely or accurately
13 disclosed to investors.
14 2. Scienter
15 122. The following facts, as alleged in more detail elsewhere in the Complaint, give rise to
16 a cogent inference which is stronger than any non-culpable inferences, that each of the defendants
17 knew or was deliberately reckless in not knowing that the foregoing statements in the May 5, 2006
18 conference call were materially false and misleading when made:
19 (a) Defendants Love, as Chairman and CEO, Titus, as CAO, and Levy as Senior
20 VP of Research and Development, were responsible for and/or knew about the clinical testing of
21 alfimeprase. They were responsible for the reports and claims relating to alfimeprase as well as the
22 press releases issued by the Company. Specifically, defendants were privy to the facts surrounding
23 the results of the alfimeprase Phase 2 CO and PAO trials and the specific facts surrounding the
24 design of the alfimeprase Phase 3 CO and PAO trials.
25 (b) According to CW 1, defendant Love wrote the protocols for all ofthe clinical
26 trials of alfimeprase and was a member of the "alfimeprase team consisting of people primarily
27 responsible for the testing and marketing of the drug.
28
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1 (c) Defendants knew or recklessly disregarded that the action ofcatheter insertion
2 can restore blood flow where there was a clot. This precise risk had been raised by CW1 prior to the
3 Class Period with high ranking officers of Nuvelo, including Love, Pena and Deitcher. Thus,
4 defendants knew that the results obtained in the Phase 2 trial of alfimeprase for PAO could have
5 been the result, in whole or in part, ofthe insertion ofthe catheter used to administer the alfimeprase,
6 rather than the action of the alfimeprase. The insertion ofthe catheter alone could have restored the
7 blood flow resulting in patients not requiring open surgery within 30 days. Thus, defendants knew or
8 recklessly disregarded that the Phase 2 trial of alfimeprase for PAO did not produce reliable results
9 that would predict the success of alfimeprase in the Phase 3 trial or FDA approval, or that would
10 indicate there would be a "low risk path to FDA approval or "rapid path to the marketability ofthe
11 drug for PAO.
12 (d) Defendants knew or recklessly disregarded that their "power calculations
13 were not reliable because they were based upon placebo assumptions which had no reasonable basis.
14 Defendants did not know how many patients avoided open surgery for 30 days as a result of the
15 action ofthe catheter breaking up the clot in the Phase 2 PAO trial, and thus, had no reasonable basis
16 for assuming how many patients in the placebo arm would avoid open surgery because their clots
17 were broken up simply by the insertion of the catheter. According to defendants, these power
18 calculations were based on assumptions about the percentage ofclots dissolved in the placebo group,
19 without regard to the fact that blood flow is restored by disruption of a clot, even if it is not
20 dissolved, and restoration of blood flow avoids surgery.
21 (e) Because of Love's and Nuvelo's VP of Manufacturing's involvement with
22 alteplase while employed by Genentech, defendants knew or recklessly disregarded that the market
23 opportunity for alfimeprase for PAO was much smaller than represented to analysts and the market
24 because of competition from off-label use of other drugs and mechanical clot-busting techniques and
25 devices.
26 (f) Because defendants Love and Titus signed Nuvelo's filings with the SEC
27 during the Class Period, they knew or recklessly disregarded that Nuvelo had not disclosed known
28
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1 material risks to the success of the Phase 3 trials, FDA approval and the commercial potential of
2 alfimeprase, as detailed herein in ¶1131-144.
3 123. The totality of these circumstances, in addition to facts alleged elsewhere in this
4 Complaint, give rise to a cogent inference which is stronger than any non-culpable inferences that
5 each of the defendants had actual knowledge or recklessly disregarded that their May 5, 2006
6 statements were materially false and misleading when made.
7 F. Defendants' August 3, 2006 False and Misleading Statements
8 124. On August 3, 2006, Nuvelo conducted a conference call with analysts to discuss the
9 Company's 2Q06 financial results. Defendants Love and Levy each participated in and spoke on
10 behalf of Nuvelo during the call. During the call, defendant Love reassured investors that the
11 Company's "collaboration with Bayer HealthCare to develop and commercialize alfimeprase
12 continues to go very well, and [that Nuvelo was] tracking to [its] goals and milestones laid out for
13 the program. Although Levy highlighted the progress Nuvelo was making on the
14 commercialization of alfimeprase and touted Bayer's continuing support, he refused to discuss or
15 disclose any clinical data with respect to CO:
16 [Levy]: Moving now to our second target indication, catheter 17 occlusion. We arepleased to announce that resultsfrom ourphase II trial of alfimeprase in its indication were published in the July 18 1st issue of the Journal of Clinical Oncology. In addition, our phase III program in this indication is progressing well. We 19 achieved our milestone of initiating the second phase III catheter occlusion trial, SONOMA-3, in the first half of 2006. This open- 20 label single-arm trial is evaluating the safety and efficacy of three milligrams of alfimeprase in 800 patients with occluded central 21 venous catheters.
22 We also continue to be on track to complete enrollment in SONOMA-2, the first trial in this program, in the second half of 23 2006, and expect to provide top-line results several months afterwards. More complete analysis ofthe data will bepresented at 24 an appropriate medical conference as soon as possible thereafter.
25 125. In addition, in response to questions from an analyst, defendant Levy stated the
26 following with respect to PAO:
27 [Levy]: So, as you suggest, the group of patients that present are heterogeneous . Almost all the patients , ifnot all the patients, do have 28 some sort of underlying fixed peripheral vascular disease, and that a
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1 thrombus generally forms on top ofthat when flow is diminished to a critical stage . We do of course select in this trial for patients who 2 have had an acute occlusion of less than 14 days. That's one thing we do. And obviously I have no data to share with you about this 3 particular trial, but I can say that we were very gratified in phase [21 tofind that alfimeprase worked very well on big clots and on small 4 clots, and we've discussed that in the past, that we've had some examples of very large clots, clots up to 60 centimeters in length, 5 that we've dissolved rapidly.
6 And it's worked on what we thought were new clots and old clots, based on the angiograms that we read showing extensive 7 collateralizations, which tend to be evidence ofan older clot. And on top of that, in phase I, we looked at patients who had chronic 8 peripheral vascular disease where the burden of their illness was fixed disease and very little was acute thrombus. And we were 9 gratified that in 40% of those patients as well we could see improvements on the angiogram and restoration ofbloodflow. 10 1. Reasons Why Statements Made on the August 3, 2006 11 Conference Call Were False and Misleading.
12 126. The statements on the August 3, 2006 conference call that Nuvelo's effort to
13 commercialize alfimeprase "continues to go very well, and [that Nuvelo was] tracking to [its] goals
14 and milestones laid out for the program, that Nuvelo was "gratified ... to find that alfimeprase
15 worked very well on big clots and on small clots in PAO that it "had some examples of very large
16 clots, clots up to 60 centimeters in length, that we've dissolved rapidly, and that alfimeprase had
17 "worked on what we thought were new clots and old clots and improved blood flows in 40% of
18 patients in the Phase 1 trials were false because the Phase 2 data was not as reliable or significant as
19 defendants had led the market to believe, nor were the existing risks to FDA Approval or
20 commercial marketability of alfimeprase for PAO and CO fully disclosed.
21 127. As alleged previously, defendants knew that blood flow in some patients enrolled in
22 the NAPA PAO trials would be restore simply by inserting the catheter into the clot to deliver the
23 drug, rather than through any action of alfimeprase, and had no basis for representing to the market
24 the degree to which the drug caused the purportedly successful Phase 2 results. Based on the small
25 size ofthe CO Phase 2 trial and the lower than expected rate of catheter clearance in the comparator
26 alteplase arm, defendants also had no reasonable basis for predicting success in the Phase 3 trials for
27 CO, because they did not know whether the dose ofalfimeprase chosen for the study in SONOMA-2
28 would yield the required results or would be appropriate for the commercial success of alfimeprase
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1 in this indication. As a result, the regulatory path for approval for CO was far from "low risk, nor
2 was there a "high probability of success in the Phase 3 PAO and CO trials , as defendants had
3 previously represented.
4 128. These statements, together with defendants' other statements regarding the purported
5 success of the Phase 2 trials and the likelihood of success in the Phase 3 trials as elsewhere alleged,
6 were also materially false and misleading to investors because Nuvelo omitted to disclose, in the
7 press release, on the conference call, or elsewhere, known risks that reduced the likelihood that the
8 Phase 2 results could be replicated in Phase 3 trials, that the Phase 3 trials would succeed or that the
9 drug would be marketable, including that: (i) in the Phase 2 PAO trial, the blood clot may have
10 simply been broken up by the action ofthe catheter pushing into the clot, rather than dissolved by the
11 action of the drug, a possibility that had been raised internally at Nuvelo even before the Phase 2
12 PAO trials were completed; (ii) in the Phase 3 CO trial, Nuvelo had agreed with the FDA to
13 demonstrate success at a statistical significance level that wasforty times more stringent than what
14 the market believed, rendering success much less likely; (iii) the market opportunity for the drug in
15 PAO was much smaller than represented to analysts and the market because ofcompetition from off-
16 label use of other drugs and mechanical clot-busting techniques, the potential impact of which was
17 not timely or accurately disclosed to investors; (iv) Nuvelo had an undisclosed "target product
18 profile which would be necessary to meet in order for the Company to market alfimeprase for CO,
19 and the Company would not proceed to market alfimeprase for that indication if the trial results did
20 not meet that profile, even if the drug was otherwise qualified for FDA approval.
21 2. Scienter
22 129. The following facts, as alleged in more detail elsewhere in the Complaint, give rise to
23 a cogent inference which is stronger than any non-culpable inferences, that each of the defendants
24 knew or was deliberately reckless in not knowing that the foregoing statements in the August 3, 2006
25 conference call were materially false and misleading when made:
26 (a) Defendants Love, as Chairman and CEO, Titus, as CAO, and Levy as Senior
27 VP of Research and Development, were responsible for and/or knew about the clinical testing of
28 alfimeprase, the agreements with the FDA about the required p-value for SONOMA-2 and the target
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1 product profile for marketing alfimeprase for CO. They were responsible for the reports and claims
2 relating to alfimeprase as well as the press releases issued by the Company. Specifically, defendants
3 were privy to the facts surrounding the results ofthe alfimeprase Phase 2 CO and PAO trials and the
4 specific facts surrounding the design of the alfimeprase Phase 3 CO and PAO trials , including the
5 requirements imposed by the FDA on SONOMA-2 (the alfimeprase Phase 3 CO trial).
6 (b) According to CW 1, defendant Love wrote the protocols for all ofthe clinical
7 trials of alfimeprase, including the protocol for SONOMA-2, and was a member ofthe "alfimeprase
8 team consisting of people primarily responsible for the testing and marketing of the drug.
9 Therefore, he had actual knowledge of the extremely stringent p-value of less than 0.00125 which
10 the FDA imposed on the SONOMA-2 trial and the "target product profile for marketing
11 alfimeprase for CO.
12 (c) As they admitted first on December 11, 2006 and in more detail on June 26,
13 2007, defendants knew that the FDA had imposed an extremely stringent p-value requirement ofless
14 than 0.00125 for the alfimeprase Phase 3 CO trial (SONOMA-2), which was forty times less than the
15 standard p-value of 0.05, and that, because of the stringent p-value imposed by the FDA, success in
16 the Phase 3 trial and FDA approval were unlikely.
17 (d) Defendants knew or recklessly disregarded that the action ofcatheter insertion
18 can restore blood flow where there was a clot. This precise risk had been raised by CW1 prior to the
19 Class Period with high ranking officers of Nuvelo, including Love, Pena and Deitcher. Thus,
20 defendants knew that the results obtained in the Phase 2 trial of alfimeprase for PAO could have
21 been the result, in whole or in part, ofthe insertion ofthe catheter used to administer the alfimeprase,
22 rather than the action of the alfimeprase. The insertion ofthe catheter alone could have restored the
23 blood flow resulting in patients not requiring open surgery within 30 days. Thus, defendants knew or
24 recklessly disregarded that the Phase 2 trial of alfimeprase for PAO did not produce reliable results
25 that would predict the success of alfimeprase in the Phase 3 trial or FDA approval, or that would
26 indicate there would be a "low risk path to FDA approval or "rapid path to the marketability ofthe
27 drug for PAO.
28
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1 (e) Defendants knew or recklessly disregarded that their "power calculations
2 were not reliable because they were based upon placebo assumptions which had no reasonable basis.
3 Defendants did not know how many patients avoided open surgery for 30 days as a result of the
4 action ofthe catheter breaking up the clot in the Phase 2 PAO trial, and thus, had no reasonable basis
5 for assuming how many patients in the placebo arm would avoid open surgery because their clots
6 were broken up simply by the insertion of the catheter. According to defendants, these power
7 calculations were based on assumptions about the percentage ofclots dissolved in the placebo group,
8 without regard to the fact that blood flow is restored by disruption of a clot, even if it is not
9 dissolved, and restoration of blood flow avoids surgery.
10 (f) Because of Love's and Nuvelo's VP of Manufacturing's involvement with
11 alteplase while employed by Genentech, defendants knew or recklessly disregarded that the market
12 opportunity for alfimeprase for PAO was much smaller than represented to analysts and the market
13 because of competition from off-label use of other drugs and mechanical clot-busting techniques and
14 devices.
15 (g) Defendants knew that Nuvelo had an undisclosed "target product profile
16 which would be necessary to meet for the marketability and commercial success of alfimeprase in
17 CO, and that the Company would not proceed to market alfimeprase for that indication if the
18 SONOMA-2 trial results did not meet that profile, even ifthe drug was otherwise qualified for FDA
19 approval.
20 (h) Because defendants Love and Titus signed Nuvelo's filings with the SEC
21 during the Class Period, they knew or recklessly disregarded that Nuvelo had not disclosed known
22 material risks to the success of the Phase 3 trials, FDA approval and the commercial potential of
23 alfimeprase, as detailed herein in ¶1131-144.
24 130. The totality of these circumstances, in addition to facts alleged elsewhere in this
25 Complaint, give rise to a cogent inference which is stronger than any non-culpable inferences that
26 each of the defendants had actual knowledge or recklessly disregarded that their August 3, 2006
27 statements were materially false and misleading when made.
28
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1 IX. MISLEADING RISK WARNINGS PROVIDE NO SAFE HARBOR
2 131. The statutory safe harbor provided for forward-looking statements under certain
3 circumstances does not apply to any ofthe allegedly false statements pleaded in this Complaint. The
4 specific statements pleaded herein were not forward-looking and were not identified as "forward-
5 looking statements when made. Rather, the false statements alleged herein are statements of
6 present fact, including statements rendered misleading by defendants' failure to accurately or
7 completely disclose current known risks to its business and operations.
8 132. To the extent there were any forward-looking statements, there were no meaningful
9 cautionary statements identifying important factors that could cause actual results to differ materially
10 from those in the purportedly forward-looking statements. Alternatively, to the extent that the
11 statutory safe harbor does apply to any forward-looking statements pleaded herein, defendants are
12 liable for those false forward-looking statements because at the time each ofthose forward-looking
13 statements was made, the particular speaker knew that the particular forward-looking statement was
14 false, and/or the forward-looking statement was authorized and/or approved by an executive officer
15 of Nuvelo who knew that those statements were false when made.
16 133. Although Nuvelo's publicly-filed reports with the SEC during the Class Period
17 included a section purporting to disclose material risks to its operations, including risks relating to
18 on-going clinical trials, those risk warnings were themselves misleading to investors. Nuvelo's
19 Report on Form 10-K, issued on March 15, 2006, did not include, for example, any specific
20 warnings regarding the risks that the purportedly favorable results ofthe Phase 2 PAO trials were the
21 result of the catheter used to deliver the drug breaking up the blood clot, that the FDA had imposed
22 an extremely stringent statistical significance standard - the 0.00 125 p-value - on the Phase 3 CO
23 trial, or that Nuvelo had an undisclosed "target product profile which would be necessary to meet in
24 order for the Company to market alfimeprase for CO, and the Company would not proceed to market
25 alfimeprase for that indication ifthe trial results did not meet that profile even ifthe results otherwise
26 qualified for FDA approval.
27 134. Instead, the Report included only general and generic risk warnings, such as "Our
28 near-term success is dependent on the success of our lead product candidate, alfimeprase, and we
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cannot be certain that it will receive regulatory approval or be successfully commercialized, and
2 "We face heavy government regulation, and FDA and international regulatory approval of our
3 products is uncertain. However, the Report did not contain any specific risk warnings regarding the
4 Phase 2 results. Instead, the 10-K included only the following general and generic statement:
5 Our clinical trials may not yield results that will enable us to obtain regulatory approval for our products. 6 We, and our collaborators, will only receive regulatory approval for a drug candidate 7 ifwe can demonstrate in carefully designed and conducted clinical trials that the drug candidate is safe and effective. We do not know whether our current or any future 8 clinical trials will demonstrate sufficient safety and efficacy to obtain the requisite regulatory approvals or will result in marketable products. Clinical trials are lengthy, 9 complex and expensive processes with uncertain results. It will take us several years to complete our testing, and failure can occur at any stage of testing. To date, we 10 have not successfully completed any Phase 3 clinical trials, and we have not completed all planned pre-clinical and Phase 1 clinical trials for each of our product 11 candidates. The results we obtain in pre-clinical testing and early clinical trials may not be predictive of results that are obtained in later studies. We may suffer 12 significant setbacks in advanced clinical trials, even after promising results in earlier studies. Based on results at any stage of clinical trials, we may decide to repeat or 13 redesign a trial or discontinue development ofone or more of our drug candidates. If we fail to adequately demonstrate the safety and efficacy of our products under 14 development, we will not be able to obtain the required regulatory approvals to commercialize our drug candidates, and our business, results of operations and 15 financial condition will be materially adversely affected.
16 135. The Report on Form 10-K was also materially false and misleading to investors
17 because it failed to disclose known risks and uncertainties regarding the comparability ofthe Phase 2
18 results with the Phase 3 trials then being conducted. When considered together with defendants'
19 public statements touting the Phase 2 results and strongly suggesting that the Phase 3 clinical trials
20 would succeed and the drug would be marketable, including the statements alleged in ¶¶92-94,100-
21 101, 107-110, the incomplete risk warnings in the Report on Form 10-K misled investors. Among
22 the risks that were not disclosed to investors were that: (i) in the Phase 2 PAO trial, the blood clot
23 may have simply been broken up by the action of the catheter pushing into the clot, rather than
24 dissolved by the action of the drug, a possibility that had been raised internally at Nuvelo even
25 before the Phase 2 PAO trials were completed; (ii) in the Phase 3 CO trial, Nuvelo had agreed with
26 the FDA to demonstrate success at a statistical significance level that wasforty times more stringent
27 than what the market believed, rendering success much less likely; (iii) the market opportunity for
28 the drug in PAO was much smaller than represented to analysts and the market because of
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1 competition from off-label use of other drugs and mechanical clot-busting techniques, the potential
2 impact of which was not timely or accurately disclosed to investors ; and (iv) Nuvelo had an
3 undisclosed "target product profile which would be necessary to meet in order for the Company to
4 market alfimeprase for CO, and the Company would not proceed to market alfimeprase for that
5 indication if the trial results did not meet that profile, even if the drug was otherwise qualified for
6 FDA approval.
7 136. On May 9, 2006, Nuvelo issued its Report on Form 10-Q for the first quarter of 2006,
8 the period ending March 31, 2006, signed by Titus and certified by both Titus and Love pursuant to
9 the Sarbanes-Oxley Act. As the CEO of Nuvelo, Love was responsible, with Titus, for reviewing
10 the Report before it was filed with the SEC and assuring the accuracy of the information reported
11 therein, including that all material known risks were disclosed to the market.
12 137. As with Nuvelo's prior public SEC filings, the I Q06 Report on Form 10-Q included
13 only general and generic risk warnings, such as "Our near-term success is dependent on the success
14 of our lead product candidate, alfimeprase, and we cannot be certain that it will receive regulatory
15 approval or be successfully commercialized, and "We face heavy government regulation, and FDA
16 and international regulatory approval of our products is uncertain. However, the Report did not
17 contain any specific risk warnings regarding the Phase 2 results. Instead, the Report merely repeated
18 the generic, general warnings found in the FY05 Report on Form 10-K, including those quoted
19 above.
20 138. Defendants failed to disclose known risks and uncertainties regarding the
21 comparability of the Phase 2 results with the Phase 3 trials then being conducted. When considered
22 together with defendants' public statements touting the Phase 2 results as strongly suggesting that
23 the Phase 3 clinical trials would be successful, and the drug would be marketable and commercially
24 successful, including the statements alleged in ¶¶92-94,100-101, 107-110, 116, 120, the incomplete
25 risk warnings in the Report on Form 10-Q misled investors.
26 139. On August 8, 2006, Nuvelo issued its Report on Form 10-Q for the second quarter of
27 2006, the period ending June 30, 2006, certified by Love pursuant to the Sarbanes-Oxley Act. As
28 the CEO ofNuvelo, Love was responsible for reviewing the Report before it was filed with the SEC
CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS - 3:07-cv-04056-MMJ -59- 3:07-cv-04056-VRW Document 31 Filed 11/09/2007 Page 63 of 79
1 and assuring the accuracy of the information reported therein, including that all material risks were
2 disclosed to the market.
3 140. As with Nuvelo's prior public SEC filings, the 2Q06 Report on Form 10-Q included
4 only general and generic risk warnings, such as "Our near-term success is dependent on the success
5 of our lead product candidate, alfimeprase, and we cannot be certain that it will receive regulatory
6 approval or be successfully commercialized, and "We face heavy government regulation, and FDA
7 and international regulatory approval of our products is uncertain. However, the Report did not
8 contain any specific risk warnings regarding the Phase 2 results. Instead, the Report merely repeated
9 the generic, general warnings found in the FY05 Report on Form 10-K, including those quoted
10 above.
11 141. Defendants failed to disclose known risks and uncertainties regarding the
12 comparability of the Phase 2 results with the Phase 3 trials then being conducted. When considered
13 together with defendants' public statements touting the Phase 2 results as strongly suggesting that
14 the Phase 3 clinical trials would be successful, and the drug would be marketable and commercially
15 successful, including the statements alleged in ¶192-94, 100-101, 107-110, 116, 120, 124-125, the
16 incomplete risk warnings in the Report on Form 10-Q misled investors.
17 142. On November 8, 2006, Nuvelo issued its Report on Form 10-Q for the third quarter of
18 2006, the period ending September 30, 2006, certified by Love pursuant to the Sarbanes-Oxley Act.
19 As the CEO of Nuvelo, Love was responsible for reviewing the Report before it was filed with the
20 SEC and assuring the accuracy of the information reported therein, including that all material risks
21 were disclosed to the market.
22 143. As with Nuvelo's prior public SEC filings, the 3Q06 Report on Form 10-Q included
23 only general and generic risk warnings, such as "Our near-term success is dependent on the success
24 of our lead product candidate, alfimeprase, and we cannot be certain that it will receive regulatory
25 approval or be successfully commercialized, and "We face heavy government regulation, and FDA
26 and international regulatory approval of our products is uncertain. However, the Report did not
27 contain any specific risk warnings regarding the Phase 2 results. Instead, the Report merely repeated
28
CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS - 3:07-cv-04056-MMJ -60- 3:07-cv-04056-VRW Document 31 Filed 11/09/2007 Page 64 of 79
1 the generic , general warnings found in the FY05 Report on Form 10-K, including those quoted
2 above.
3 144. Defendants failed to disclose known risks and uncertainties regarding the
4 comparability of the Phase 2 results with the Phase 3 trials then being conducted. When considered
5 together with defendants' public statements touting the Phase 2 results as strongly suggesting that
6 the Phase 3 clinical trials would be successful, and the drug would be marketable and commercially
7 successful, including the statements alleged in ¶192-94, 100-101, 107-110, 116, 120, 124-125, the
8 incomplete risk warnings in the Report on Form 10-Q misled investors.
9 X. ADDITIONAL SCIENTER ALLEGATIONS
10 A. Individual Defendants ' Compensation Was Tied to Financial Performance 11 145. According to defendants' Proxy Statement, filed with the SEC on April 18, 2007, the 12 Individual Defendants' bonus compensation was heavily tied to the Company's financial 13 performance: 14 The Compensation Committee determines each individual executive bonus by 15 reference to the achievement of corporate goals and the individual executive's achievement of functional goals for the functional organization that he or she 16 manages. The Company's Board of Directors sets annual corporate goals that fall into the following categories: ... Strengthening the Company's financial position. 17 Also included among the 2006 goals was the completion of the NAPA-2 and SONOMA-2 Phase 3 18 clinical trials. 19 146. A chart demonstrating the Individual Defendants ' compensation follows . The chart, 20 particularly the bonuses granted to defendants Love and Levy (Titus left the Company before year- 21 end 2006) evidence the apparent emphasis placed on "strengthening the Company's financial 22 position -both Love and Levy received huge 2006 bonuses - Love's was over $100,000 more than 23 it had been in 2005, even though the Company wholly failed to obtain one ofthe explicit 2006 goals 24 of completing the Phase 3 clinical trials for PAO and CO: 25
26
27
28
CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS - 3:07-cv-04056-MMJ -61- 3:07-cv-04056-VRW Document 31 Filed 11/09/2007 Page 65 of 79
1 Name Year Salary ($) Bonus ($) Options
2 Ted W. Love 2006 640,417 289,248 375,000 2005 612,500 187,500 750,000 3 2004 596,000 500,000 4 2003 583,583 133,332
5 Michael D. Levy9 2006 398,333 184,828 80,000 6 2005 381,250 200,000 2004 39,831 15,000 175,000 7
8 Gary S. Titus 2006 182,917 30,000 2005 226,667 65,000 175,000 9 2004 192,646 65,000 2003 169,896 19,999 10
11 B. Defendants Were Motivated to Commit Fraud to Gain Access to Capital through the Follow-On Offering 12 147. Defendants had motive and opportunity to inflate the price of Nuvelo securities 13 because the Company was desperately in need of cash. By the end of the Company's fiscal year 14 2005, it had less than $38 million in cash and an established track record of using positive 15 announcements about alfimeprase to generate cash. 16 148. As a result of defendants' false statements, Nuvelo's stock traded at inflated levels 17 during the Class Period, trading as high as $20.71 per share in August 2006, and the Company was 18 able to sell $119 million worth of Nuvelo securities in the Follow-On Offering. 19 149. On January 24, 2006, one day after Nuvelo issued its press release entitled "Nuvelo 20 Receives FDA Fast Track Status for Alfimeprase, the Company announced it would conduct the 21 Follow-On Offering. Just as the Company had done since at least 2003, the Company again 22 leveraged the buildup it created around alfimeprase, only this time through false and misleading 23 statements, as a tool for raising much needed cash to continue business and fund the exorbitant pay 24 packages provided to insiders. Defendants' false and misleading statements about alfimeprase 25 allowed it to complete the sale of 7.475 million shares at $16 per share for proceeds, before 26
27 9 Levy joined the Company in November 2004. 28
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1 deducting underwriting discounts and offering expenses, ofapproximately $119.6 million on January
2 30, 2006.
3 150. To convince investors ofthe potential for alfimeprase, defendants repeatedly claimed
4 that the CO and PAO trials were just the first step in commercial development ofthe drug, and other
5 treatments , with potentially larger patient populations, were also in the offing. For example, in its
6 Registration Statement and Prospectus for the January 2006 Follow-on Offering and its Report on
7 10-K for fiscal year 2005, issued March 15, 2006, Nuvelo stated:
8 Our lead cardiovascular development program is for alfimeprase, a novel, direct- acting thrombolytic agent, or blood clot dissolver, which is currently in Phase 3 9 clinical trials for the treatment of acute peripheral arterial occlusion, or PAO, and for the treatment of catheter occlusion. We also intend to expand this development 10 program by initiating a Phase 2 clinical trial in the second halfof2006 to evaluate thepotential ofalfcmeprasefor the treatment ofischemic stroke and another Phase 11 2 clinical trial in 2007 to evaluate thepotential ofalfimeprase to treat deep venous thrombosis, or DVT. 12 151. The Company' s Registration Statement and Prospectus filed in connection with the 13 January 30, 2006 offering described the ongoing alfimeprase clinical testing and provided a chart 14 purporting to depict the Company's drug pipeline and the anticipated commercialization of 15 alfimeprase: 16
17
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25 152. Nuvelo never initiated the planned Phase 2 clinical trial for the treatment ofischemic 26 stroke, even though it was supposed to begin before Phase 3 results for either the PAO or CO trials 27 were completed. This suggests that defendants were aware that the Phase 2 results were not 28
CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS - 3:07-cv-04056-MMJ -63- 3:07-cv-04056-VRW Document 31 Filed 11/09/2007 Page 67 of 79
1 predictive of success in Phase 3, and defendants were not confident that PAO and CO were "low
2 risk paths to regulatory approval or would be "rapid to market, well before the failure ofthe Phase
3 3 study was publicly announced on December 11, 2006.
4 XI. PRESUMPTION OF RELIANCE AND PROXIMATE LOSS CAUSATION/ECONOMIC LOSS 5 153. Plaintiffs' claims for securities fraud are asserted under the fraud on the market theory 6 of reliance. The market price of Nuvelo's securities, including common stock regularly traded on 7 the NASDAQ market and options regularly traded on AMEX, CBOE, PHLX, ISE and PSE, was 8 artificially inflated by the false and misleading statements complained of herein, including 9 defendants' false statements regarding the results of the Phase 2 trials of alfimeprase, the 10 comparability of those results to the expected results from ongoing Phase 3 clinical trials of 11 alfimeprase, the likelihood ofFDA approval, the marketability and commercial potential ofthe drug 12 and the omission ofmeaningful warnings about those risks. These false statements inflated the price 13 of Nuvelo's stock, causing injury to investors when that inflation was eliminated as the risks and 14 conditions hidden by defendants' fraudulent scheme were revealed on December 11, 2006 and the 15 market learned that the Phase 3 trials had failed: 16
17 Nuvelo vs. NASDAQ Biotechnology Index December 1, 2005 - June 29, 2007 18 200
19 20 150 WFN NASCIAO Biotechnology 21 Index
22 100
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25
26 0 12:01:2005 02+1012006 04.21+2006 06!29.2006 09,07:2006 11.14+2006 01!26+2007 04+05[2007 06+14.2007 01+06:2006 03117 12006 05:2512046 08±012006 10+11;2406 12119±2006 0310212007 05110.2007 27
28
CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS - 3:07-cv-04056-MMJ -64- 3:07-cv-04056-VRW Document 31 Filed 11/09/2007 Page 68 of 79
1 Had defendants corrected their false statements and made meaningful disclosure ofthe risks prior to
2 or during the Class Period, Nuvelo's securities would not have traded as high as they did during the
3 Class Period, or would have declined sooner than they did following the end of the Class Period.
4 A. Applicability of Presumption of Reliance: Fraud on the Market Doctrine 5 154. At all relevant times, the market for Nuvelo 's securities was an efficient market for 6 the following reasons, among others: 7 (a) Nuvelo's security met the requirements for listing, and was listed and actively 8 traded on the NASDAQ market, a highly efficient and automated market; 9 (b) Nuvelo's options met the requirements for listing and were listed and actively 10 traded on the AMEX, CBOE, PHLX, ISE and PSE, highly efficient and automated markets; 11 (c) As a regulated issuer, Nuvelo filed periodic public reports with the SEC and 12 NASDAQ; 13 (d) Nuvelo regularly communicated with public investors via established market 14 communication mechanisms, including through regular disseminations of press releases on the 15 national circuits ofmajor newswire services, publications on its website and other Internet sites, and 16 through other wide-ranging public disclosures, such as through conference calls, communications 17 with the financial press and other similar reporting services; and 18 (e) Nuvelo was followed by securities analysts employed by 15 major brokerage 19 firms, including Deutsche Bank; Prudential; Brean Murray; CIBC World Markets; Oppenheimer; 20 Needham; Pacific Growth Equities; Piper Jaffray & Co.; Miller Johnson; Banc of America; UBS; 21 Morgan Joseph; JP Morgan; Wachovia and William Blair & Company, each of which regularly 22 wrote reports which were distributed to the sales force and certain customers of their respective 23 brokerage firms. Each of these reports was publicly available and entered the public marketplace. 24 155. As a result of the foregoing, the market for Nuvelo' s securities promptly digested 25 current information regarding Nuvelo from all publicly-available sources and reflected such 26 information as Nuvelo's securities price. Under these circumstances, all purchasers of Nuvelo's 27 securities during the Class Period suffered similar injury through their purchase of Nuvelo's 28
CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS - 3:07-cv-04056-MMJ -65- 3:07-cv-04056-VRW Document 31 Filed 11/09/2007 Page 69 of 79
1 securities at artificially inflated prices and their subsequent decline in value, thus a presumption of
2 reliance applies.
3 B. Defendants' False and Misleading Statements Proximately Caused Economic Loss to Nuvelo's Investors 4 156. On January 5, 2006, the first day of the Class Period, Nuvelo announced that it had 5 convinced Bayer to fund further clinical trials of alfimeprase, which the market viewed as an 6 endorsement of defendants ' prior statements regarding the Phase 2 results and the commercial 7 potential of alfimeprase, causing Nuvelo's stock price to skyrocket on elevated trading volume of 8 10,075, 500 shares , more than 17 times its daily average . Supra ¶72. Nuvelo's stock increased from 9 $9.01 to close at $12 . 67, a one day gain of more than 40%. By comparison, the NASDAQ 10 Biotechnology Index ("NBI ), of which Nuvelo is a member, rose a modest 0.55% that day. 11 Nuvelo's stock price continued to increase over the next three days as the market digested and 12 reacted to this news , closing at $ 15.62 per share on January 10, 2006 - an additional gain of 20% in 13 value on continued elevated trading volumes in excess of 26 million shares per day. By comparison, 14 the NBI gained a modest 3 . 18% during the same time period. 15 157. During the Class Period, defendants maintained the artificial inflation in Nuvelo's 16 securities prices by continuing to make false and misleading statements regarding the anticipated 17 results of the Phase 3 clinical trials of alfimeprase, the extent to which the reported results of the 18 Phase 2 trials were a reliable indicator ofboth the positive action of alfimeprase in dissolving blood 19 clots and catheter occlusions, the likelihood of similar results being achieved in the Phase 3 trials, 20 the "low risk and "rapid path to FDA approval and the marketability and commercial potential of 21 alfimeprase. But for defendants' failure to meaningfully disclose the known risks in its periodic 22 filings with the SEC or their false and misleading statements, Nuvelo's securities would not have 23 traded at the elevated levels they did during the Class Period. 24 158. The inflation in Nuvelo's securities prices was eliminated when the market learned 25 that, contrary to defendants' statements during and even prior to the Class Period, alfimeprase had 26 not worked as represented in the Phase 2 trials, that the Phase 3 trials had failed as a result of risks 27 that had been concealed or downplayed by defendants in a manner that misled investors during the 28
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Class Period, that the drug did not meet the Company's target product profile necessary to market it
2 for CO, and the FDA had imposed an extraordinary high standard for approval of the drug for CO.
3 Most ofthis inflation was eliminated when Nuvelo announced, on December 11, 2006 - the last day
4 of the Class Period - that alfimeprase had failed the Phase 3 clinical trials, causing Nuvelo's stock
5 price to plummet. Nuvelo's share price fell from $19.55 to close at $4.05, a one day drop of nearly
6 80% on extraordinary trading volume of 90,150,600 shares - more than 150 times its daily average,
7 causing injury to investors who purchased at the fraud-inflated prices prevailing in the market during
8 the Class Period. By comparison, the NBI experienced a modest drop of 0.6% that day.
9 159. The remaining inflation was eliminated on June 27, 2007, when Bayer pulled out of
10 further efforts to develop alfimeprase and defendants revealed the full extent by which the risks of
11 failure in the Phase 3 trials had been withheld from investors, causing additional injury to Class
12 members who continued to hold their securities through the date of that announcement. Nuvelo's
13 stock dropped from $3.34 to $2.73 that day on elevated trading volume of 6,930,900 shares, a one-
14 day decline of more than 18%. By comparison, the NBI increased 1.93% on the same day.
15 160. The foregoing allegations describe plaintiffs ' general theory ofdamages, demonstrate
16 that plaintiffs' damages were caused by the scheme to defraud as alleged herein, and negate any
17 inference that plaintiffs' losses were the result of general market conditions or other factors wholly
18 unrelated to the false and misleading information complained ofherein. Upon further investigation
19 and expert analysis, plaintiffs may assert that there were additional inflationary or corrective events
20 that caused or contributed to the damages they incurred.
21 XII. GROUP PLEADING ALLEGATIONS
22 161. Because of their senior executive and managerial positions with Nuvelo and, in the
23 case ofLove, his position as Chairman ofNuvelo's board of directors, the Individual Defendants had
24 access to the adverse undisclosed information described herein regarding the Company's business
25 operations and present and future business prospects. The Individual Defendants obtained such
26 information through internal corporate documents and communications with other corporate officers
27 and employees, attendance at management and board of directors meetings and committees thereof
28 and through reports and other information provided to them in connection therewith. The Individual
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1 Defendants knew or recklessly disregarded that said adverse information had not been disclosed to,
2 and was being concealed from, the investing public.
3 162. It is appropriate to treat the Individual Defendants as a group for pleading purposes
4 and to presume that the false, misleading and incomplete information contained in the Company's
5 public filings, press releases and other publications as alleged herein are the collective actions ofthe
6 narrowly defined group of Individual Defendants. Each of the above officers and/or directors of
7 Nuvelo, by virtue of their high-level positions with the Company, directly participated in the
8 management ofthe Company, was directly involved in the day-to-day operations ofthe Company at
9 the highest levels and was privy to confidential proprietary information concerning the Company and
10 its business operations and present and future business prospects, as alleged herein. Said defendants
11 were involved in drafting, producing, reviewing and/or disseminating the false and misleading
12 statements and information alleged herein, were aware of or deliberately disregarded that the false
13 and misleading statements were being issued regarding the Company, and approved or ratified these
14 statements, in violation of the federal securities laws.
15 163. As officers and/or directors and controlling persons of a publicly held company
16 whose common stock was, and is, registered with the SEC pursuant to the Exchange Act, traded on
17 the NASDAQ, and whose options were registered and traded publicly on five options exchanges,
18 and governed by the provisions of the federal securities laws, the Individual Defendants each had a
19 duty to disseminate promptly accurate and truthful information with respect to the Company's
20 business operations and present and future business prospects , and to correct any previously issued
21 statement that had become materially misleading or untrue, so that the market price of the
22 Company's securities would be based upon truthful and accurate information. The Individual
23 Defendants ' misrepresentations and omissions during the Class Period violated these specific
24 requirements and obligations.
25 164. Each of the defendants is liable as a direct participant with respect to the wrongs
26 complained of herein. In addition, the Individual Defendants, by reason of their status as senior
27 officers and/or directors, were "controlling persons within the meaning of §20 ofthe Exchange Act,
28 and had the power and influence to cause the Company to engage in the unlawful conduct
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1 complained ofherein. Because of their positions of control, the Individual Defendants were able to
2 and did, directly or indirectly, control the conduct of Nuvelo's business.
3 165. The Individual Defendants, because oftheir positions with the Company, controlled
4 and/or possessed the authority to control the contents of Nuvelo's reports, press releases and
5 presentations to securities analysts, money and portfolio managers and institutional investors, i.e.,
6 the market. Each of the Individual Defendants was provided with copies of the Company's reports
7 and press releases alleged herein to be misleading, prior to or shortly after their issuance and had the
8 ability and opportunity to prevent their issuance or cause them to be corrected. Thus, each of the
9 Individual Defendants had the opportunity to commit the fraudulent acts alleged herein.
10 XIII. CLASS ACTION ALLEGATIONS
11 166. Plaintiffs bring this action as a class action pursuant to Fed. R. Civ. P. 23(a) and
12 (b)(3) on behalf of a class consisting of all persons who purchased the Company's publicly traded 13 securities on the open market or in a registered stock offering during the period January 5, 2006 14 through December 8, 2006, inclusive, and who were damaged thereby (the "Class ). Excluded from 15 the Class are defendants, the Company's officers and directors, affiliates, legal representatives, heirs, 16 predecessors, successors and assigns, and any entity in which the Company has a controlling interest 17 18 or of which the Company is a parent or subsidiary.
19 167. The members of the Class are located in geographically diverse areas and are so
20 numerous that joinder of all members is impracticable. The disposition of their claims in a class 21 action will provide substantial benefits to the parties and the Court. Nuvelo had approximately 53 22 million shares of its common stock outstanding and active options trading. 23 168. Common questions of law or fact exist as to all members of the Class and 24
25 predominate over any questions affecting solely individual members of the Class. Among the
26 questions of law or fact common to the Class are:
27 (a) Whether the Exchange Act was violated by defendants;
28 (b) Whether defendants omitted and/or misrepresented material facts;
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1 (c) Whether defendants' statements omitted material facts necessary to make the
2 statements made, in light of the circumstances under which they were made, not misleading;
3 (d) Whether defendants knew or deliberately disregarded that their statements
4 were false and misleading;
5 (e) Whether the prices of Nuvelo publicly traded securities were artificially
6 inflated; and
7 (f) The extent of damage sustained by Class members and the appropriate
8 measure of damages.
9 169. Plaintiffs' claims are typical of the claims of the members of the Class as plaintiffs
10 and members of the Class sustained damages arising out of defendants' wrongful conduct in 11 violation of federal laws as complained of herein. 12 170. Plaintiffs will fairly and adequately protect the interests ofthe members ofthe Class 13 and have retained counsel competent and experienced in class action and securities litigation. 14 Plaintiffs have no interests antagonistic to or in conflict with those of the Class. 15
16 171. A class action is superior to other available methods for the fair and efficient
17 adjudication of this controversy since joinder of all members of the Class is impracticable.
18 Furthermore, because the damages suffered by individual Class members may be relatively small, 19 the expense and burden of individual litigation make it impossible for the Class members 20 individually to redress the wrongs done to them. There will be no difficulty in the management of 21 this action as a class action. 22
23 FIRST CLAIM FOR RELIEF
24 For Violation of Section 10(b) of the Exchange Act and Rule lOb-5 Against All Defendants 25 172. Plaintiffs incorporate all prior allegations of the Complaint herein by reference. 26 173. During the Class Period, defendants disseminated or approved the false statements 27 specified above, which they knew or recklessly disregarded were materially false and misleading in 28
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1 that they contained material misrepresentations and failed to disclose material facts necessary in
2 order to make the statements made, in light of the circumstances under which they were made, not
3 misleading. 4 174. Defendants violated § 10(b) of the Exchange Act and Rule I Ob-5 in that they: 5 (a) Employed devices, schemes and artifices to defraud; 6 (b) Made untrue statements of material facts or omitted to state material facts
necessary in order to make the statements made, in light ofthe circumstances under which they were 8 made, not misleading; or 9 (c) Engaged in acts, practices and a course ofbusiness that operated as a fraud or 10 deceit upon plaintiffs and others similarly situated in connection with their purchases of Nuvelo 1 1 securities during the Class Period. 12 175. As a result of the dissemination of the materially false and misleading information 13 and failure to disclose material facts, as set forth above, the market price ofNuvelo's publicly traded 14
15 securities was artificially inflated during the Class Period. In ignorance of the fact that the market
16 price ofNuvelo's publicly traded securities was artificially inflated, and relying directly or indirectly
17 on the false and misleading statements made by defendants, or upon the integrity of the market in 18 which the securities trade, and/or on the absence of material adverse information that was known to 19 or recklessly disregarded by defendants but not disclosed in public statements by defendants during 20 the Class Period, plaintiffs and the other members ofthe Class acquired Nuvelo securities during the 21
22 Class Period at artificially high prices and were damaged thereby as demonstrated, in part, by the
23 declines in the price of Nuvelo's securities following the revelation of the relevant truth to the
24 market. 25 176. As a direct and proximate result of defendants' wrongful conduct, plaintiffs and the 26 other members ofthe Class suffered damages in connection with their purchases ofNuvelo securities 27 during the Class Period. 28
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1 SECOND CLAIM FOR RELIEF
2 For Violation of Section 20(a) of the Exchange Act Against All Defendants 3 177. Plaintiffs incorporate all prior allegations of the Complaint herein by reference. 4 178. The Individual Defendants acted as controlling persons ofNuvelo within the meaning 5
6 of §20(a) ofthe Exchange Act. By reason oftheir positions as officers and/or directors ofNuvelo, and
7 their ownership of Nuvelo stock, the Individual Defendants had the power and authority to cause
8 Nuvelo to engage in the wrongful conduct complained of herein. Nuvelo controlled each of the 9 Individual Defendants and all ofits employees. By reason of such conduct, the Individual Defendants 10 and Nuvelo are liable pursuant to §20(a) of the Exchange Act. 11 PRAYER FOR RELIEF 12 WHEREFORE, plaintiffs pray for judgment as follows: 13 A. Declaring this action to be a proper class action pursuant to Rule 23 of the Federal 14 Rules of Civil Procedure; 15
16 B. Awarding plaintiffs and the members of the Class damages , including interest;
17 C. Awarding plaintiffs and the members reasonable attorneys' fees, expert witness fees
18 and other costs; and 19 D. Awarding such equitable and/or injunctive or other relief as the Court may deem just 20 and proper. 21 JURY DEMAND 22 Plaintiffs demand a trial by jury. 23 DATED: November 9, 2007 COUGHLIN STOIA GELLER 24 RUDMAN & ROBBINS LLP DENNIS J. HERMAN 25 MONIQUE C. WINKLER 26
27 /s/ Monique C. Winkler MONIQUE C. WINKLER 28
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1 100 Pine Street, Suite 2600 2 San Francisco, CA 94111 Telephone : 415/288-4545 3 415/288-4534 (fax)
4 Liaison Counsel
5 BERGER & MONTAGUE, P.C. SHERRIE R. SAVETT 6 CAROLE A. BRODERICK BARBARA A. PODELL 7 PHYLLIS M. PARKER JOSHUA C. SCHUMACHER 8 1622 Locust Street Philadelphia, PA 19103 9 Telephone : 215/875-3000 215/875-4604 (fax) 10 SCHATZ NOBEL IZARD, P.C. 11 ANDREW M. SCHATZ JEFFREY S. NOBEL 12 NANCY A. KULESA One Corporate Center 13 20 Church Street, Suite 1700 Hartford, CT 06103 14 Telephone : 860/493-6292 860/493-6290 (fax) 15 Co-Lead Counsel for Plaintiffs 16 T:\casesSF\nuvelo\CPT00046407.doc 17
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1 CERTIFICATE OF SERVICE
2 I hereby certify that on November 9, 2007, I electronically filed the foregoing with the Clerk
3 of the Court using the CM/ECF system which will send notification of such filing to the e-mail
4 addresses denoted on the attached Electronic Mail Notice List, and I hereby certify that I have
5 mailed the foregoing document or paper via the United States Postal Service to the non-CM/ECF
6 participants indicated on the attached Manual Notice List.
7 I certify under penalty of perjury under the laws of the United States of America that the
8 foregoing is true and correct. Executed on November 9, 2007.
9 s/ Monique C. Winkler 10 MONIQUE C. WINKLER
11 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 12 100 Pine Street, 26th Floor San Francisco, CA 94111 13 Telephone : 415/288-4545 14 415/288-4534 (fax) E-mail: [email protected] 15
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CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS - 3:07-cv-04056-MMJ CAND-ECF Page 1 of 2 Case 3:07-cv-04056-VRW Document 31 Filed 11/09/2007 Page 78 of 79
Mailing Information for a Case 3:07-cv-04056-MJJ
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Mario Alba Lerach Coughlin Stoia Geller Rudman & Robbins LLP 58 South Service Road Suite 200 Melville, NY 11747
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https://ecf.cand.uscourts.gov/cgi-bin/MailList.pl?579334984389854-L 390_0-1 11/9/2007 Case 3:07-cv-04056-VRW Document 31-2 Filed 11/09/2007 Page 1 of 9
EXHIBIT A Case 3:07-cv-04056-VRW Document 31-2 Filed 11/09/2007 Page 2 of 9
CERTIFICATION OF NAMED PLAINTIFF
I. Juan Pablo Cabrera, hereby certify that the following is true and correct to the best of my knowledge, information and belief:
I have reviewed the complaint (the "Complaint") and would be willing to serve as a lead plaintiff on behalf of the class (the "Class") as defined in the Complaint, including providing testimony at deposition and trial, if necessary..
I did not purchase the security that is the subject of this action at the direction of
Plaintiff's counsel or in order to participate in this private action.
My transactions in the securities of Nuvefo, Inc.. during the Class Period defined in the Complaint are set forth on. Schedule A attached hereto.
4. During the three years prior to the date of this Certification, I have not sought to serve, nor have I served, as a representative party on behalf of a class in any private action arising under the federal securities laws.
I will not accept any payment for serving as a representative party on behalf of the
Class beyond my pro rata share of any possible recovery, except such reasonable costs and expenses (inc)uding lost wages) directly relating to the representation of the Class as ordered or approved by the Court.
I declare under penalty of perjury that the foregoing is true and correct.
Executed this j day of September, 2007
.Iu;an Pablo Cabrera Case 3:07-cv-04056-VRW Document 31-2 Filed 11/09/2007 Page 3 of 9
SCHEDULE A - TRANSACTIONS IN NETVELO, INC.
Purchases of Nuvelo, Inc. Date Transaction Price per share
1/5/2006 2,100 $1215 1/5/2006 50D $12 17 1/5/2006 632 $12 18 1 /512006 900 $12 14 1/5/2006 7,168 $12 19 1/5/2006 1,000 $12.20 1/612006 7,700 $1221 1/512006 400 $1234 1/512006 9,600 $1235 1/5/2006 1,320 $1251 1/5/2006 50D $1252 1/5/2006 40D $1253 1/5/2006 1,280 $1255 1/5/2006 1,500 $12.57 115/2006 5,000 $1258 1/1112006 1,900 $15..14 1/11/2006 3,100 $15.15 2115/2006 4,800 $18..44 2115/2006 5,200 $1843 2/2712006 43 $1788 2/27/2006 4,507 $1789 212712006 5,500 $1785 2/27/2006 1,300 $1800 2/2712006 1,300 $18.00 2/2712006 3,700 $17.99 2/27/2006 69 $1792 212712006 9,931 $1790 2/27/2006 4,200 $17 94 2/27/2006 100 $1787 2127/2006 650 $1786 2128/2006 100 $17.30 2/28/2006 2,800 $17..29 2/28/2006 1,400 $17 50 2/28/2006 500 $1748 2/28/2006 2,100 $17 32 2/2812006 3,100 $17 49 3/2312006 5,000 $1600 3/23/2006 5,000 $1593 5/19/2006 1,200 $1477 5/19/2006 2,800 $1475 5/19/2006 1,343 $1476 5/19/2006 2,457 $1479 5/19/2006 100 $1478 5119/2006 2,000 $14.74 Case 3:07-cv-04056-VRW Document 31-2 Filed 11/09/2007 Page 4 of 9
5/19/2006 100 $1473 6/13/2006 600 $1488 6/13/2006 2,952 $1489 6/13/2006 3,708 $1490 6/13/2006 2,740 $1491 7/2612006 100 $1681 7/26/2006 600 $1682 7/2612006 700 $1684 7/26/2006 731 $1689 7/26/2006 400 $1687 7/26/2006 331 $16 8B 7/26/2006 800 $1690 7/26/2006 838 $1691 7/26/2006 500 $1681 1/1812006 2000 $1485 1/18/2006 100 $1486 1/18/2006 2900 $1486 1 / 18/2006 100 $1485 1/18/2006 400 $1485 111812006 100 $1485 1/18/2006 1500 $14 85 1/1812006 700 $14..85 1/18/2006 100 $1485 1/18/2006 600 $1484 2/27/2006 300 $1797 2/27/2006 100 $1797 2/27/2006 100 $1797 2/27/2006 795 $1797 2127/2006 100 $1797 2/27/2006 200 $1800 2/27/2006 100 $1800 2/27/2006 154 $1800 2/27/2006 800 $1800 2/27/2006 1500 $1800 212712006 500 $1800 2/27/2006 100 $1800 2/27/2005 351 $1800 2127/2006 500 $1800 2/27/2006 400 $18 00 3/13/2006 100 $17 10 3/13/2006 100 $17 10 3/1312006 150 $1710 3/13/2006 100 $1709 3/13/2006 500 $17.09 3/13/2006 300 $1708 3/13/2006 300 $1708 3/13/2006 100 $1708 3/13/2006 500 $1708 3/13/2006 100 $1708 3/13/2006 200 $1708 3/13/2006 100 $1707
2 Case 3:07-cv-04056-VRW Document 31-2 Filed 11/09/2007 Page 5 of 9
3/13/2006 50 $1706 3/13/2006 100 $1706 311312006 100 $1706 3/13/2006 200 $1705 3/23/2006 1 DO $1599 3/23/2006 600 $1599 3/23/2006 100 $1600 3/2312006 368 $1600 3123/2006 100 $1600 3/23/2006 200 $16 00 3/23/2006 64 $1600 3/23/2006 300 $1600 3/23/2006 100 $1600 312312006 100 $1600 3123/2006 100 $1600 3/2312006 200 $1600 3/23/2006 66B $1600 5/1912006 100 $1483 5/19/2006 100 $1482 5/19/2006 100 $14.82 5/19/2006 200 $1482 5/19/2006 100 $14 81 5/19/2006 100 $14 80 5/19/2006 100 $14 76 5/19/2006 100 $1478 5/19/2006 100 $1478 5/19/2006 100 $1478 5/19/2006 100 $1476 5/19/2006 100 $1476 5119/2006 100 $1476 5/19/2006 100 $1470 5/19/2006 200 $1470 5/19/2006 800 $1469 5/19/2006 100 $1469 5/19/2006 200 $1469 5/19/2006 100 $14.69 5/19/2006 100 $1469 5/19/2006 300 $1469 5/19/2006 100 $1479 5119/2006 100 $1479 5119/2006 100 $1479 511912006 100 $1479 5/19/2006 100 $1479 5/1912006 100 $1468 5/19/2006 100 $1467 6/13/2006 100 $1495 6/13/2006 100 $1496 6/1312006 100 $1495 6/1312006 100 $14.94 6/13/2006 793 $1494 6113/2006 100 $1493 Case 3:07-cv-04056-VRW Document 31-2 Filed 11/09/2007 Page 6 of 9
6/13/2006 100 $1492 6113/2006 7 $1497 6/1312006 100 $1492 611312006 100 $1492 6/13/2006 200 $1492 6/1312006 100 $1491 6/13/2006 100 $14 91 6/13/2006 1000 $1491 6/13/2006 100 $14 91 6/13/2006 100 $14,91 6/1312006 300 $15.00 6/13/2006 700 $14 97 6/13/2006 100 $1496 6/13/2006 500 $1496 6/1312006 100 $1496 6/1312006 100 $1500 6/1512006 578 $1584 611512006 100 $1584 6/15/2006 200 $15 84 6115/2006 100 $1583 6/1512006 22 $15.83 6/15/2006 100 $1582 6/15/2006 1000 $1582 6/1512006 200 $1582 6/15/2006 100 $1582 6/15/2006 100 $1582 6/1512006 100 $15.82 6/15/2006 100 $15.82 6/15/2006 200 $1582 6115/2006 100 $1582 7/26/2006 99 $1689 7/26/2006 100 $18,89 7/26/2006 100 $1589 7/26/2006 100 $1688 7126/2006 100 $1688 7/2612006 10D $1686 7/26/2006 100 $1668 7/26/2006 100 $1688 7/26/2006 100 $16 86 7/2612006 1 $1686 7/2612006 100 $16.86 11/9/2006 100 $18.19 11/9/2006 343 $18 19 11/912006 200 $18 18 11/9/2006 100 $18 17 1119/2006 100 $18.17 11/9/2006 100 $1817 11/9/2006 48 $1815 11/9/2006 75 $18 15 11/9/2006 100 $18.15 11/9/2006 100 $18 14
4 Case 3:07-cv-04056-VRW Document 31-2 Filed 11/09/2007 Page 7 of 9
11/9/2006 100 $18 14 111912006 100 $18 14 11/9/26036 100 $18 13 1119/2006 100 $1813 11/9/2006 100 $18 13 11/912606 100 $18.11 1119/2016 134 $1811 Case 3:07-cv-04056-VRW Document 31-2 Filed 11/09/2007 Page 8 of 9
Sales of Nuvelo, Inc.
Date Transaction Price per sbare 1/11/2006 1,100 $1522 1111/2006 100 $1521 1/11/2006 500 $1520 1/11/2006 2,000 $15 17 1/11/2006 300 $15 16 2/9/2006 9,600 $1800 2/9/2006 311 $1776 2/9/2006 3,100 $17 75 219/2006 600 $1759 219/2006 300 $1758 2/9/2006 717 $1757 2/9/2006 200 $1755 219/2006 500 $1756 2/9/2006 400 $17.53 2/9/2006 500 $1754 219/2006 1,183 $1752 2/9/2006 97 $17 19 2/9/2006 1,100 $17.18 2/9/2006 2,650 $1716 2/912006 300 $17 14 2/9/2006 600 $17 17 2/9/2006 10Q $1712 2/9/2006 100 $1802 2/9/2006 1,300 $1801 2/9/2006 5,000 $17 95 2/9/2006 989 $17.78 2/9/2006 600 $17 77 2/9/2006 600 $1751 2/9/2006 500 $1754 2/9/2006 353 $17 15 2/9/2006 300 $17 11 2/9/2006 9,500 $1705 2/1612006 220 $1830 2/16/2006 100 $1826 2/16/2006 500 $1824 2/16/2006 1,339 $1823 2/16/2006 5,200 $1825 2/16/2006 900 $1836 2/16/2006 741 $1832 2/16/2006 600 $18 31 2/16/2006 400 $1827 2/9/2006 100 $1741 2/9/2006 100 $18..00 2/9/2006 1,105 $1800 2/9/2006 100 $18.00 2/9/2006 100 $18.00 2/912006 300 $1740 Case 3:07-cv-04056-VRW Document 31-2 Filed 11/09/2007 Page 9 of 9
2/9/2006 2,000 $1740 2/9/2006 1,317 $1740 2/9/2006 83 $1737 2/9/2006 95 $1800 2/9/2006 1,300 $1802 2/9/2006 100 $1800 2219/2006 100 $1800 2/9/2006 100 $1802 2/9/2006 100 $1802 2/9/2006 100 $1802 219/2006 100 $1802 2/9/2006 100 $1802 2/9/2006 100 $1741 2/9/2006 100 $1741 219/2006 1,000 $1741 9/5/2006 2 $20 83 9/5/2006 22 $20 83 9/5/2006 500 $20 83 9/5/2006 100 $20 83 9/5/2006 100 $2083 9/5/2006 100 $2083 9/5/2006 100 $2083 9/5/2006 100 $20.83 9/5/2006 100 $20.83 9/5/2006 100 $20 B3 9/5/2006 100 $2083 9/5/2006 600 $20 63 9/6/2006 43 $2083 9/5/2006 33 $2083
7 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 1 of 44
EXHIBIT B Case 3 :07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 2 of 44
NUVELO, INC. CERTIFICATION PURSUANT O THE FEDERAL SECURITIES LAWS
Frank C. and Patricia A. Petronis ("Plaintiffs"), duly swear and say, as to the claims asserted under the federal securities laws, that
I . Plaintiffs have reviewed a complaint against Nuvelo, Inc. and certain of its officers, and Plaintiffs approve ofits contents, and authorize their selected counsel, Berger & Montague, P.C. to file a complaint and/or lead plaintiff papers on their behalf,
2. Plaintiffs did not purchase the security that is the subject ofthis action at the direction of its counsel or in order to participate in this private action.
3. Plaintiffs are willing to serve as representative plaintiffs on behalf of the class, including providing testimony at deposition and trial, if necessary.
4. Plaintiffs' transactions in the securities of Nuvelo, Inc. between and including January 5, 2006 through December 8, 2006, inclusive (the "Class Period"), are as follows:
Securities Purchased/Sold Date of Purchase/Sale Price per Security
See attached schedule
5. Plaintiffs have not sought to serve as class representatives in any other action fled under the United States federal securities laws in the past three (3) years preceding the date on which this certification is signed.
6. Plaintiffs have not accepted and will not accept any payment for serving as representative plaintiffs on behalf of the class beyond their pro rata share of any recovery, or as ordered or approved by the court, including any award for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.
We declare under penalty of esjury under the laws of the United States that the foregoing is true and correct_ Executed this day of 2007.
By: Fra,Rk C. Petronis
By: Patricia A, Petronis 2151 E. Boulevard Bethlehem, PA 18107 Tel. (610) 691-0804
413517 03.w,d Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 3 of 44
Patricia Petronis A/C #1 - Transactions in Nuvelo Options 115106 throuah 12/8/06
Option Date No. Contracts Price per Cost of No. Contracts Price per Proceeds of Type Purchased Contract Purchase Sold Contract Sale
CDQGC 04/03/06 2 $3.6075 $ 722 CDQGC 04/03/06 3 $3.6075 $ 1,082 CDQGC 04/21/06 1 $3.5075 $ 351 CDQGC 04/21/06 3 $3.1075 $ 932 CDQGC 04/21/06 4 $3.5075 $ 1,403 CDQGC 04/27/06 3 $2.3075 $ 692 CDQAW 05/05/06 5 $3.0000 $ 1,500 CDQAW 05/05/06 5 $3.0000 $ 1,500 ZZCAD 06/02/06 2 $7.0275 $ 1,406 ZZCAD 06/02/06 3 $5.2408 $ 1,572 ZZCAD 06/02/06 3 $5.2408 $ 1,572 ZZCAD 06/02/06 5 $4.7275 $ 2,364 ZZCAD 06/14/06 3 $7.0275 $ 2,108 ZZCAD 06/14/06 7 $7.0175 $ 4,912 ZZCAD 07/03/06 5 $5.0000 $0* CDQJV 07/03/06 1 $4.9000 $ 490 ZZCAD 07/03/06 3 $7.0175 $ 2,105 ZZCAD 07/03/06 7 $6.81175 $ 4,772 CDQJV 07/03/06 5 $4.9175 $ 2,459 ZZCAD 07/03/06 2 $5.0000 $ 1,000 ZZCAD 07/03/06 3 $5.0000 $ 1,500 CDQAW 07/03/06 5 $3.4924 $ 1,746 ZZCAD 07/06/06 2 $6.5275 $ 1,306 ZZCAD 07/06/06 3 $6.8175 $ 2,045 CDQGC 07/06/06 3 $2.5000 $ 750 ZZCAD 07/06/06 2 $5.3000 $ 1,060 ZZCAD 07/06/06 3 $5.3000 $ 1,590 CDQAW 07/06/06 5 $3.4924 $ 1,746 CDQHC 07/07/06 1 $2.5500 $ 255 CDQHC 07/07/06 2 $2.4000 $ 480 CDQHC 07/07/06 4 $2.5500 8 1,020 CDQHC 07/07/06 5 $2.6000 $ 1,300 CDQGC 07/10/06 1 $2.0000 $ 200 CDQGC 07/10/06 2 $2.0000 $ 400 CDQGC 07/11/06 4 $2.5000 $ 1,000 CDQJC 07/14/06 10 $4.0175 $ 4,018 CDQGC 07/19/06 3 $2.0000 $ 600 CDQGC 07/19/06 3 $2.0000 $ 600 CDQJV 07/20/06 2 $4.9575 $ 992 ZZCAW 07/27/06 5 $5.5000 $0* ZZCAW 07/27/06 5 $1.0494 EXERCISED ZZCAW 07/27/06 5 $1.0494 EXERCISED ZZCAD 07/27/06 5 $4.7000 $ 2,350 ZZCAW 07/27/06 7 $6.5000 $ 4,550 ZZCAW 07/27/06 7 $6.5218 $ 4,565 ZZCAW 07/27/06 8 $7.8745 $ 6,300 ZZCAD 07/27/06 5 $5.9823 $ 2,991 ZZCAW 07/27/06 10 $5.4000 $ 5,400 ZZCAW 07/28/06 2 $1.1394 EXERCISED ZZCAW 07/28/06 2 $1.1394 EXERCISED ZZCAW 07/28/06 3 $1.8363 EXERCISED ZZCAW 07/28/06 3 $1.8363 EXERCISED CDQJV 07/28/06 5 $4.7000 EXERCISED CDQJV 07/28/06 8 $4.8000 EXERCISED Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 4 of 44
CDQJV 07/28/06 1 $4.8200 $ 482 ZZCAW 07/28/06 1 $8.3580 $ 836 ZZCAW 07/28/06 1 $8.3580 $ 836 ZZCAW 07/28/06 1 $8.6468 $ 865 ZZCAW 07/28/06 1 $8.6468 $ 865 ZZCAW 07/28/06 3 $9.1538 $ 2,746 ZZCAW 07/28/06 3 $9.1538 $ 2,746 CDQJV 07/28/06 3 $4.8200 $ 1,446 ZZCAW 07/28/06 5 $5.5000 $ 2,750 CDQJV 08/03/06 6 $4.2000 $ 2,520 CDQJV 08/03/06 4 $4.2000 $ 1,680 ZZCAW 08/08/06 5 $2.8857 EXERCISED ZZCAW 08/08/06 5 $2.8857 EXERCISED CDQIC 08/08/06 5 $1.8000 $ 900 ZZCAW 08/08/06 5 $10.2032 $ 5,102 CDQIC 08/08/08 5 $1.8000 $ 900 ZZCAW 08/08/06 1 $5.0000 $ 500 ZZCAW 08/08/06 4 $5.0000 $ 2,000 ZZCAW 08/10/06 2 $4.8000 $0* ZZCAW 08/10/06 1 $2.8857 EXERCISED ZZCAW 08/10/06 1 $2.8857 EXERCISED ZZCAW 08/10/06 1 $3.1744 EXERCISED ZZCAW 08/10/06 2 $10.3476 $ 2,070 CDQIC 08/14/06 5 $2.0500 $ 1,025 CDQHC 08/15/06 1 $2.0000 $ 200 CDQHC 08/15/06 2 $2.0500 $ 410 CDQHC 08/15/06 4 $2.0500 $ 820 CDQHC 08/15/06 5 $2.0000 $ 1,000 ZZCAD 08/17/06 2 $1.0452 EXERCISED ZZCAD 08/17/06 3 $2.2451 EXERCISED ZZCAD 08/17/06 3 $2.2351 EXERCISED ZZCAD 08/17/06 1 $8.7726 $ 877 ZZCAD 08/17/06 2 $7.5727 $ 1,515 ZZCAD 08/17/06 3 $5.2000 $ 1,560 ZZCAD 08/17/06 3 $5.9823 $ 1,795 ZZCAD 08/17/06 3 $5.9823 $ 1,795 ZZCAW 08/17/06 7 $5.4466 $ 3,813 ZZCAW 08/17/06 7 $5.4466 $ 3,813 ZZCAD 08/17/06 8 $5.4000 $ 4,320 ZZCAD 08/18/06 4 $2.2351 EXERCISED ZZCAD 08/18/06 1 $2.0351 EXERCISED ZZCAD 08/18/06 1 $7.9600 $ 796 CDQJD 08/18/06 10 $1.0000 $ 1,000 CDQJW 08/18/06 10 $2.8000 $ 2,800 CDQJW 08/18/06 10 $2.8000 $ 2,800 ZZCAD 08/18/06 4 $8.1625 $ 3,265 CDQJC 08/18/06 10 $2.0824 $ 2,082 ZZCAD 08/18/06 5 $5.5000 $ 2,750 CDQJD 08/22/06 10 $1.4000 $ 1,400 CDQJW 08/22/06 10 $2.0500 $ 2,050 CDQJW 08/22/06 10 $2.1000 $ 2,100 CDQDD 08/22/06 10 $3.5000 $ 3,500 ZZCAD 08/23/06 9 $2.0800 $ 0 ZZCAD 08/23/06 1 $1.7500 $ 0 ZZCAD 08/23/06 2 $2.0352 EXERCISED ZZCAD 08/23/06 7 $1.8351 EXERCISED ZZCAD 08/23/06 1 $1.5452 EXERCISED CDQJD 08/23/06 5 $1.1000 $ 550 ZZCAW 08/23/06 4 $7.2000 $ 2,880 096 $ 0096'0$ 04 90/44/60 aroao 096 $ 0096'0$ 04 90/44/60 uroao 0L8 $ 0006'Z$ £ 90/44/60 X01703 9L1, $ 0096'0$ 9 90/44/60 aroao 0Z 4 $ 000 0$ 9 9014 4160 XH3ZZ 0 $ 0000"99 9 90/14/60 XV3ZZ 88b'£ $ EZ86"t$ L 90/90/60 avozz 00I. $ 0000'L$ £ 90/90/60 Arts= Z89` 4 $ EZLZ'9$ E 90/90/60 IFd3ZZ 0o ? 4 $ 0000'3 Z 90/90/60 Ar003 9L0` 4 $ 66LE'9$ Z 90/90/60 GVOZZ 17 90'4 $ t LZ'9$ Z 90/90/60 avozz SE9 $ 86LS'S$ 4 90/90/60 avozz 09Z'E $ 0009'95 9 90/90/60 avozz 00VE $ 0008'9$ 9 90/90/60 avozz 0017'£ $ 0008'9$ 9 90/90/60 0V3ZZ 8bE`E $ f'Z8L'ib$ L 90/40/60 avozz 008'Z $ 0009'9$ 9 90/40/60 31000 008'Z $ 0009'9$ 9 90/40/60 01003 9617'L $ 17Z86't'$ E 90/40/60 OV3ZZ 009'9 $ 000018 8 90/40/60 0d3ZZ 009' 4 $ 0000'Z$ 8 90/40/60 xuoao 0017' 1- $ 0000'8 Z 90/40/60 CIVOZZ 9£t' 1. $ 'Z8L'17$ £ 9014£180 avozz 961. $ SZ86'9$ Z 9014E/90 C VOZZ 00I. $ 0000'1.5 £ 90148/80 0V3ZZ 009' 4 $ 000Z'E5 9 90148190 XCiOUQ OOb' 4 $ 0000'L$ Z 90/42/80 adOZZ 098'£ $ oooL'1$ 9 9016Z/90 ArOa3 080`£ $ 000L'L$ P 90/62/80 Ar003 OLL $ 000L'L$ I. 90/62/80 nroao 00L`Z $ 00017'9$ 9 90/62/80 3r003 OE0`Z $ 0006'2$ L 90/62/80 Xaoao 0L8 $ 0006'2$ £ 90/62/80 X0003 000'2 $ 0000'9$ 9 90117Z180 Gv3zz 000'£ $ 0000'9$ 9 90117Z180 avozz 99b'Z $ t ZL6'b$ 9 90/ /80 MVOZZ OOZ'Z $ 000b'b$ 9 90/PZ180 01003 M' 1 $ £ZLb'9$ E 90/t' /80 MV3ZZ M' b $ EZLb'9$ £ 90/P /80 MV3ZZ 816 $ I ZPL'b$ Z 901PZ180 MV3ZZ L-V4 $ 17ZLt7'9$ 4 90/i7 /80 MY3ZZ L-V9 $ PPZLti'S$ 4 9011VZ190 MVOZZ 00£`L $ 0008'L$ 04 901i7Z180 Md3ZZ ObL $ o00b'L$ I. 90/P /90 MVOZZ 03SI3213X3 Z00V 3 b 90/i /90 avozz 03SI3m3X3 826£'2$ I. 90/t 2180 aV3ZZ 03SI3Ul3X3 8Z6VZ$ Z 901NZ180 avozz 0 $ 0002'0$ 6 90/t 2180 GY3ZZ 0 $ 0009" 4$ 4 90/i /80 OV3ZZ 0 $ 0069'85 4 90/172/80 avozz 0 $ 096£'2$ Z 901bZ180 GVQZZ 90£'P $ EZ8£'9$ 8 901EZ/90 MV3ZZ 000'£ S 0000'95 9 90/ Z/80 avozz 000'£ $ 0000'95 9 901£2180 OV3ZZ L179 $ EZL17'9$ 4 901£2/80 MV3ZZ L179 $ EZL17'9$ 4 90/£Z/80 MV3ZZ 008'E $ 0002 2$ 01. MEMO 00043 009`8 $ 000Z'L$ 9 9012180 MY3ZZ
j7j 10 9 abed LOOZ1601 PeI!d E-^E }uewnooa Mbn-990j70-AD-Lo: eseO Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 6 of 44
CDQJC 09/15/06 5 $4.2000 $ 2,100 CDQDX 09/18/06 5 $2.0000 $ 1,000 CDQDX 09/18/06 7 $2.0000 $ 1,400 CDQDX 09/18/06 8 $2.0000 $ 1,600 CDQJC 09/21/06 5 $3.4000 EXERCISED CDQJV 09/22/06 1 $5.0000 $ 500 CDQLC 11/09/06 5 $3.4280 $ 1,714 ZZCAD 11/29/06 5 $5.9000 $ 2,950 ZZCAD 11/29/06 1 $5.4700 $ 547 ZZCAD 11/29/06 4 $5.4725 $ 2,189 TOTAL $ 154,656 $ 128,286
Excess of Cost of Purchases Over Proceeds from Sales = $ (26,370)
TOTAL LOSS = $ (26,370)
* Indicates sale of contracts purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 18 contracts purchased at earlier dates.) "* Indicates sale of contracts after the end of the class period. Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 7 of 44
Frank Petronis A/C #2 - Transactions in Nuvelo ODtions 115106 throuah 1218106
Option Date No. Contracts Price per Cost of No. Contracts Price per Proceeds of Type Purchased Contract Purchase Sold Contract Sale
ZZCAD 07/27/06 5 $4.7000 $ 2,350 ZZCAW 07/27/06 10 $5.4000 $0* ZZCAW 07/27/06 5 $5.5000 $0* TOTAL $ 2,350 $ -
Excess of Cost of Purchases Over Proceeds from Sales = $ (2,350)
TOTAL LOSS = $ (2,350)
* Indicates sale of contracts purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 15 contracts purchased at earlier dates.) Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 8 of 44
Frank Petronis A/C #3 - Transactions in Nuvelo Options 115106 through 1218106
Option Date No. Contracts Price per Cost of No. Contracts Price per Proceeds of Type Purchased Contract Purchase Sold Contract Sale
ZZCAD 08/18106 5 $5.5000 $0* ZZCAD 08/18/06 5 $5.5000 $ 0 * CDQJW 08/18/06 10 $2.0500 $ 2,050 CDQJW 08/18/06 10 $2.0500 $ 2,050 CDQJC 08/18/06 10 $4.0000 $ 4,000 CDQJC 08/18/06 20 $4.0000 $ 8,000 ZZCAW 08/18/06 10 $6.7000 $ 6,700 ZZCAW 08/18/06 10 $6.9000 $ 6,900 ZZCAW 08/18/06 10 $6.8000 $ 6,800 CDQDD 08/22/06 10 $3.5000 $0* CDQDD 08/22/06 10 $3.1000 $0* ZZCAD 08/22/06 10 $5.9000 $0* ZZCAD 08/22/06 4 $5.8000 $0* ZZCAD 08/22/06 6 $5.8000 $0* CDQJW 08/22/06 5 $2.3000 $ 1,150 CDQJW 08/22/06 5 $2.3000 $ 1,150 CDQAD 08/22/06 10 $2.6000 $ 2,600 CDQJC 08/22/06 15 $4.7000 $ 7,050 CDQJC 08/22/06 10 $4.4000 $ 4,400 ZZCAW 08/22/06 5 $7.3000 $ 3,650 ZZCAW 08/22/06 10 $7.0000 $ 7,000 CDQAV 08/23/06 10 $7.5000 $0* CDQIW 08/23/06 10 $2.2500 $0* ZZCAD 08/23/06 1 $5.9000 $0* ZZCAD 08/23/06 7 85.9000 $ 0 * ZZCAD 08/23/06 2 $5.9000 $ 0 * ZZCAD 08/23/06 2 $6.1000 $ 0 CDQDC 08/23/06 10 $6.4000 $ 6,400 CDQJC 08/23/06 15 $4.7000 $ 7,050 ZZCAW 08/23/06 1 $7.4000 $ 740 ZZCAW 08/23/06 4 $7.4000 $ 2,960 ZZCAW 08/23/06 10 $7.4000 $ 7,400 ZZCAD 08/24/06 3 $6.0000 $ 1,800 ZZCAD 08/24/06 2 $6.0000 $ 1,200 ZZCAD 08/24/06 5 $6.0000 $ 3,000 ZZCAW 08/24/06 5 $7.5000 $ 3,750 ZZCAW 08/24/06 10 $7.4000 $ 7,400 CDQJW 10/10/06 10 $1.7500 $ 1,750 CDQJW 10/10/06 10 $1.7500 $ 1,750 CDQJW 10/10/06 5 $1.7500 $ 875 CDQJW 10/10/06 5 $1.9000 $ 950 ZZCAD 10/10/06 3 $5.8000 $ 1,740 ZZCAD 10/10/06 2 $5.8000 $ 1,160 ZZCAD 10/10/06 5 $5.8000 $ 2,900 CDQKC 10/10/06 10 $4.5000 $ 4,500 CDQKC 10/10/06 10 $4.6000 $ 4,600 CDQKC 10/10/06 10 $4.9000 $ 4,900 CDQKC 10/10/06 10 $4.9000 $ 4,900 CDQKC 10/10/06 10 $5.0000 $ 5,000 CDQKD 10/10/06 20 80.9500 $ 1,900 CDQJW 10/10/06 20 $1.9000 $ 3,800 TOTAL $ 133,525 $ 12,400 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 9 of 44
Excess of Cost of Purchases Over Proceeds from Sales = $ (121,125)
TOTAL LOSS = $ {121,125)
* Indicates sale of contracts purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 82 contracts purchased at earlier dates.) Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 10 of 44
Frank Petronis A/C #4 - Transactions in Nuvelo Options 1/5106 through 1218106
Option Date No. Contracts Price per Cost of No. Contracts Price per Proceeds of Type Purchased Contract Purchase Sold Contract Sale
CDQAB 01/05/06 1 $2.3873 $0* CDQAB 01/05/06 6 $2.3874 $ 0 CDQAB 01/05/06 10 $2.3874 $ 0 * CDQAB 01/05/06 11 $2.3810 $o* CDQAB 01/05/06 22 $2.3874 $0* CDQDV 01/05/06 3 $1.2641 $ 379 CDQDV 01/05/06 3 $1.2774 $ 383 CDQDV 01/05/06 4 $1.2774 $ 511 CDQDV 01/05/06 6 $1.2874 $ 772 CDQDV 01/05/06 1 $1.2874 $ 129 CDQDV 01/05/06 9 $1.4820 $ 1,334 CDQDV 01/05/06 4 $1.4820 $ 593 CDQDV 01/05/06 10 $1.3351 $ 1,335 CDQDV 01/05/06 20 $1.3351 $ 2,670 CDQGC 01/05/06 10 $1.0740 $ 1,074 CDQGC 01/05/06 10 $1.0740 $ 1,074 CDQGB 01/05/06 10 $3.6195 $ 3,620 CDQGU 01/05/06 10 $5.2195 $ 5,220 CDQGU 01/05/06 37 $5.4144 $ 20,033 CDQDV 01/06/06 3 $1.7625 $ 529 CDQDV 01/06/06 3 $1.7625 $ 529 CDQDV 01/06/06 4 $1.7125 $ 685 CDQDV 01/06/06 6 $1.7125 $ 1,028 CDQDV 01/06/06 1 $1.7195 $ 172 CDQDV 01/06/06 9 $1.7195 $ 1,548 CDQDV 01/06/06 4 $1.8175 $ 727 CDQDV 01/06/06 10 $1.8175 $ 1,818 CDQDV 01/06/06 20 $1.7660 $ 3,532 CDQGC 01/06/06 10 $1.1338 $ 1,134 CDQGC 01/06/06 9 $1.1338 $ 1,020 CDQGC 01/06/06 6 $1.0857 $ 651 CDQGC 01/06/06 15 $1.0857 $ 1,629 CDQGC 01/06/06 19 $1.0857 $ 2,063 CDQGV 01/06/06 5 $2.0804 $ 1,040 CDQGV 01/06/06 5 $2.0804 $ 1,040 CDQGC 01/09/06 1 $1.5374 $ 154 CDQGC 01/09/06 10 $1.5305 $ 1,531 CDQGC 01/09/06 10 $1.5375 $ 1,538 CDQBV 01/10/06 5 $2.8153 $ 1,408 CDQBV 01/10/06 5 $2.8153 $ 1,408 CDQBV 01/10/06 5 $2.8153 $ 1,408 CDQBV 01/10/06 10 $2.8153 $ 2,815 LWVAC 01/10/06 10 $4.1804 $ 4,180 $0* CDQGW 01/11/06 20 $1.9499 CDQGW 01/11/06 30 $1.9499 $0* LWVAW 01/11/06 5 $4.4734 $ 0 LWVAW 01/11/06 10 $4.3804 $ 0 CDQGC 01/11/06 10 $3.0000 $ 3,000 CDQGC 01/11/06 10 $3.0000 $ 3,000 CDQGC 01/11/06 10 $3.0000 $ 3,000 CDQGC 01/11/06 9 $3.0000 $ 2,700 CDQGC 01/11/06 6 $3.0000 $ 1,800 L8b`£ $ PLBt,'£$ 04 9010£140 AS= PPL' 1- $ PLSt,'£$ 9 9010£140 A8003 L8£'£ $ PL8£'£$ 01. 90/05/40 A8D©a 088'2 $ 1088'2$ 01. 90108140 AM= 174L' 4 $ tLBi'E$ 9 9010£140 A9Da= L£L' 4 $ 17£Lb'£$ 9 9010£140 nsoaa 1769'4 $ 'L8£'£$ 9 90108140 Asom iL9`Z $ 9648'£$ L 9010£140 AODao 02:8`£ $ 96 48'2$ 0 4 901013140 A3DO3 1.99' 4 $ 99Z 4't'$ 1P 90108140 A30a3 21.7 $ 99Z 4'P$ 4 90102140 A30a3 L90'£ $ £ 28'£$ 8 9019Z/10 A0DCI3 9£S'Z $ SZZ9'C$ L 90/92/40 Aa0a3 09L'4 $ PO8L' l$ 04 90/92/40 MODao 4i?6 $ 9 98' 4$ 9 90/9240 M0003 £88' I. $ Me, 4$ 0 4 90/9240 MJDa3 086' i $ P086' 4$ 0 4 90/92/40 -'MJDO3 PL9'Z $ 8Z9L'4$ 94 901bZ140 MJDO3 998'4 $ £998'1.$ 04 901PZ140 MoOao 86L'Z $ £598'4$ 94 901tiZ140 MOOG3 £9L' 4 $ 9Z9L' 4$ 04 901PZ140 MJDOO 098 $ 964L'4$ 9 90117Z140 M0003 098 $ 964L'4$ 9 901PZ140 MDOW 488 $ 9Z9L' 4$ 9 90I6Z140 MJDUO .o$ 17£L vv$ S 901PZ140 MYAMI 9Z0`9 $ ZLLO'ti$ 9!. 90/02/40 AODU3 948'2 $ 9ZZ0'17$ L 90/02/40 AODcO 080'2 $ P020'Z$ 04 90/02/40 M0003 61-01- $ PL£0'Z$ S 90/02/1-0 MJDCI3 9Z 4' 4 $ 66P3'Z$ 9 9016 4110 M0003 9Z4`4 $ 6617Z-Z$ 9 90/64/1-0 MJL`)U3 099' 4 $ 000 4' 45 9 4 90/64/40 MGDa3 .0$ 66PZ'Z$ 9 9016W40 MJDU3 .o$ 0P89"4$ OZ 9018W40 MJDaa 8441. $ 9Z44'4$ 04 901L1-/40 MODCO v££ $ 9Z44'4$ £ 901LW40 Ma003 0£Z $ SLb 4' 1-$ Z 90/1-4/40 MUD03 £90`2 $ 9934'P$ 9 901L 4140 n0003 OZZ'E $ 9642'£$ 04 go/u40 nBDao 909'4 $ 9313E5 9 90/34/40 ABDa3 0 $ ti£LV-V$ 9 90/24/40 MYAM1 ^0 $ ME L$ OP 90/24/40 MJDO3 0 $ tzL£L' 1$ OZ 90/24/40 MODaa .o$ P0£8' 4$ 04 90/24/40 MODOO .o$ 1^£ZL' 4$ 9 90121.140 MDOGO LUL' 4 $ 49£ 4' 4$ 9 4 90/41-/40 MCIDOO 921-1. $ 4984'4$ 04 90/41-/40 MOba3 47£ $ 49£ 4' 4$ £ 9014 6140 WOOD LZZ $ 4924' 4$ Z 9014 4140 MODCO OWE $ 96 40'8$ 0 4 9014 4140 AB= O3i'9 $ 96 W95 0 4 9044/40 OVAM1 000'8 $ 0000'2$ 04 90/1.4/40 390W 000'8 $ 0000'25 0 4 90! 4 4140 39t)aO ON $ 0000'8$ 4 904 MO4140 30003 890'3 $ 9934'P5 9 90/44/40 ADOW OOL'9 $ 0000•85 64 90/44/40 30003 00917 $ 0000'25 9 4 9014 4140 oeoao
j7t, 10 1.1. abed LOOZ1601 L. 1. Pal! E-^E }uewnooa Mbn-990j70-AO-Lo. eseO Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 12 of 44
CDQCV 01/30106 3 $3.8195 $ 1,146 CDQCV 01/30/06 10 $3.8195 $ 3,820 CDQCV 01/30/06 10 $3.9125 $ 3,913 CDQCV 01/30/06 10 $3.9195 $ 3,920 CDQCV 02/01/06 10 $4.7195 $ 4,720 CDQCV 02/01/06 10 $4.5195 $ 4,520 LWVAW 02/14/06 10 $6.0803 $ 0 CDQGW 02/14/06 10 $2.6195 $ 2,620 CDQCV 02/14/06 1 $4.9873 $ 499 CDQCV 02/14/06 4 $4.9873 $ 1,995 CDQCV 02/14/06 10 $4.9803 $ 4,980 CDQGD 02/15/06 15 $1.8328 $0* CDQGW 02/15/06 5 $3.1125 $ 1,556 CDQGW 02/15/06 10 $3.1195 $ 3,120 CDQCV 02/15/06 7 $5.6773 $ 3,974 TOTAL $ 1 58,542 $ 72,769
Excess of Cost of Purchases Over Proceeds from Sales = $ (85,774)
TOTAL LOSS = $ (85,774)
* Indicates sale of contracts purchased prior to class period, on a first-in, firstout basis. (At the start of the class period, the client owned 250 contracts purchased at earlier dates.) Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 13 of 44
Frank Petronis A/C #5 - Transactions in Nuvelo Options 115106 through 1218106
Option Date No. Contracts Price per Cost of No. Contracts Price per Proceeds of Type Purchased Contract Purchase Sold Contract Sale
CDQJC 09/20/06 6 $3.4700 $0* CDQJV 09/20/06 20 $3.4700 $ 0 CDQJC 09/21/06 6 $3.4700 $ 0 CDQJC 09/21/06 6 $3.4700 $o* CDQJV 09/21/06 20 $3.4700 $0* CDQJV 09/21/06 20 $3.4700 $0* ZZCAD 10/31/06 20 $3.4700 $ 6,940 TOTAL $ 6,940 $ -
Excess of Cost of Purchases Over Proceeds from Sales = $ (6,940)
TOTAL LOSS = $ (6,940)
* Indicates sale of contracts purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 78 contracts purchased at earlier dates.) Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 14 of 44
Frank Petronis A/C #6 - Transactions in Nuvelo Options 115106 through 1218106
Option Date No. Contracts Price per Cost of I I No. Contracts Price per Proceeds of Type Purchased Contract Purchase Sold Contract Sale
CDQGC 01/06/06 10 $1.0739 $ 1,074 CDQGC 01/06/06 5 $1.0739 $ 537 CDQGC 01/06/06 5 $1.0739 $ 537 CDQBV 01/10/06 10 $3.2195 $ 3,220 CDQBV 01/10/06 5 $3.1195 $ 1,560 CDQBV 01/10/06 5 $3.1195 $ 1,560 CDQGC 01/11/06 5 $2.8765 $ 1,438 CDQGC 01/11/06 10 $3.0195 $ 3,020 CDQGC 01/11/06 5 $3.1195 $ 1,560 CDQGC 01/11/06 5 $3.1195 $ 1,560 CDQGW 01/12/06 5 $1.8804 $0* CDQGW 01/12/06 5 $1.8804 $ 940 CDQCV 01/23/06 5 $3.6265 $ 1,813 CDQBV 01/30/06 5 $3.5873 $ 1,794 CDQBV 01/30/06 5 $3.5733 $ 1,787 CDQGC 01/30/06 5 $3.2733 $ 1,637 CDQCV 01/30/06 5 $4.1265 $ 2,063 CDQCV 01/31/06 5 $4.8265 $ 2,413 CDQGW 01/31/06 5 $2.8265 $ 1,413 CDQGW 01/31/06 5 $2.8265 $ 1,413 CDQGW 02/01/06 5 $2.5304 $ 1,265 CDQGW 02/01/06 5 $2.5304 $ 1,265 CDQCV 02/02/06 5 $4.3265 $ 2,163 LWVAW 02/14/06 5 $6.0733 $0* LWVAW 02/14/06 9 $5.9873 $0* CDQGW 02/14/06 5 $2.6265 $ 1,313 TOTAL $ 26,509 $ 10,835
Excess of Cost of Purchases Over Proceeds from Sates = $ ( 15,674)
TOTAL LOSS = $ (15,674)
* Indicates sale of contracts purchased prior to class period, on a first-in, fi rst-out basis. (At the start of the class period, the client owned 19 contracts purchased at earlier dates.) Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 15 of 44
Frank & Patricia Petronis A/C #1 - Transactions in Nuvelo Stock 115106 through 1218106
Date No. Shares Price per Cost of Purchase No. Shares Price per Proceeds of Purchased Share Sold Share Sale
03/02/06 200 $17.5700 $ 3,514 03102/06 500 $17.5700 $ 8,785 03/02/06 300 $17.5700 $ 5,271 03/03/06 200 $17.4599 $ 3,492 03/03/06 500 817.4599 $ 8,730 03/03/06 300 $17.4599 $ 5,238 03/15/06 200 $17.0700 $ 3,414 03115/06 500 $17.0700 $ 8,535 03/15/06 300 $17.0700 $ 5,121 03/27/06 290 $15.9995 $0. 03/27/06 10 $16.0000 $0. 03/27/06 274 $16.0397 $0. 03/27/06 426 $16.0095 $0. 04/19/06 200 $17.3456 $ 3,469 04/19/06 500 $17.3456 $ 8,673 04/19/06 300 $17.3456 $ 5,204 04/20106 200 $17.4437 $ 3,489 04120/06 500 $17.4437 $ 8,722 04/20/06 100 $17.4437 $ 1,744 04/20/06 200 $17.4550 $ 3,491 04/25/06 500 $16.4795 $0* 04/26/06 500 $16.2195 $0* $0. 04/27/06 500 $16.1595 04/27/06 500 $16.1995 $0. 04/27/06 500 $16.3395 $0. 04/27/06 500 $16.3539 $0* 04/27/06 500 $16.2795 $0* 04/27/06 500 816.3295 50 * 04/27/06 1,000 $16.5595 $ 0 * 04/27/06 500 $16.4895 $0* 04/27/06 161 $16.3734 $ 0 04/27/06 339 $16.3500 $ 0 * $0. 04/28/06 178 $16.2634 04/28/06 622 $16.3834 $ 0 04/28/06 200 $16.3495 $ 0 05/02/06 1,000 $15.5895 $ 0 05/02/06 2,000 $15.6845 $ 0 * 05/02/06 1,000 $15.6831 $ 0 05/02/06 1,000 $15.6895 $0* 05/02/06 1,000 $15.7095 $ 0 * 05/02/06 500 $15.7295 $0* 05/02106 268 $15.9173 $ 4,266 05/02/06 432 $15.7700 $ 6,813 05/02/06 420 $15.7700 $ 6,623 05/02/06 148 $15.7700 $ 2,334 05/02/06 432 $15.6000 $ 6,739 05/02/06 300 $15.6000 $ 4,680 05/02/06 268 $15.6000 $ 4,181 05/02/06 232 $15.8258 $ 3,672 05/02/06 400 815.8258 $ 6,330 05/02/06 100 $15.9199 $ 1,592 05/03/06 500 $15.9095 $ 0 05/03/06 500 $16.0195 $ 0 * 05/03/06 500 $16.0795 $ 0 05/03/06 500 $16.1096 $ 0 * 05/03/06 500 $16.0595 $0- 05103/06 200 $15.9496 $ 0 05/03/06 400 $15.7450 $ 6,298 051031106 500 815.7600 $ 7,880 05/03/06 100 $15.7100 $ 1,571 05/03/06 200 $15.7100 $ 3,142 05/03/06 200 $15.7100 $ 3,142 6€9`9 $ L969'91.$ 004 90/04/90 64£`£ $ L969'91-$ 00Z 90/04/90 .o$ 9669'93 009 90/04/90 0££`£ $ 0099'91-$ OOZ 90/60/90 96Z'8 $ 0069'94$ 009 90/60/90 099`4 $ 0009'94$ 00L 90/60/90 01-9'9 $ 0009'94$ 00t 90/60/90 00£'8 $ 0009'945 009 90/60/90 299`4 $ 5ZZ9'94$ 004 90/60190 9£9`44 $ 5339'94$ 00L 90/60/90 .o$ 9409'93 000'4 90/60/90 .o$ 6£69'93 009 90/60/990 0 $ 6669'93 009 90/60/90 .o$ 9689'93 009 90/60/90 0 $ 964L'93 009 90/60/90 £90'5 S 091-8"93 008 90/80/90 1i99' 4 S 09178'93 004 90180/90 090'9 S 8888'94$ 008 90/80/90 990'9 S £858'93 008 90/90/90 684`9 $ 00£4'L4$ 008 90/80/90 W6,4 4 $ 00£ 4'L 4 $ 00L 90/80/90 604`9 S 00£0'L4$ 008 90180/90 4Z6' 4 4 S 00E0'L 4$ 00L 90190/90 860'17 S 001-0'L 1.$ 88Z 90190190 990'4 5 004013 Z9 90/90/90 909'9 $ 004014$ 009 90/90/90 ZOb'£ S 0040'14$ OOZ 90190/90 9171.9 $ 0094'L4$ 008 90/80/90 9L9'8 $ 0094'L1-$ 009 90/80/50 94L'4 $ 0094'14$ 004 90/90/50 941'4 $ 0091-L1-$ 004 90/80/90 .o$ 91'8L'93 000'Z 90/80/90 .o$ L1-9L'93 009 90/90/90 0 $ 961L'945 009 90/80/90 0 $ 964L'94$ ODZ 90/80/90 .o$ 961['945 008 90/80/90 00Z't 4 $ 009L'L 4$ 008 90/90/90 055'£ $ 009L'L 45 OOZ 90/90/50 01-8L1- $ 001-8'L 4$ 000'4 90/90/90 16£`5 $ 0686-L 45 008 90/90/90 Z69'Z4 $ 0686-L1-$ OOL 90/90/90 498'9 $ Z8£8'L3 008 90/50/90 646'8 $ Z828'L3 009 90/90/90 899'€ $ Z8E8'L3 00Z 90/90/90 .o$ 9681'94$ 000`4 90/90/90 . 0 5 9691'94$ 000'4 90/90/90 .o$ 8Z69'9 4$ 009'4 90/90/90 6091. S 6680'945 004 90/170/90 9L£'9 S 0946'94$ OOb 90/1-0/90 96L17 S 00L91-$ 008 90/tb0/90 ZL91. $ 00ZL'91-$ 004 90/170/90 ZL9`4 $ 00ZL'94$ 004 90/170/90 906'L 5 0048'93 009 90/170/90 99L`1 S 0569'94$ 008 90/170/90 688`4 $ 0968'94$ 004 90/40/90 1199`6 $ 1904'94$ 009 90/10/90 .09 9ZL8'94$ 00014 90/170/90 .0$ 966L'S4$ 004 90/40/90 .o S 9Z88'93 004 90/40/90 • 0 $ £346'94$ 898 90/170/90 .05 9ZZ6'S4$ Z£4 90/170/90 *0$ 5868'545 009 90/170/90 6ZL'17 $ 099L'915 008 90180150 9L4'4 $ 099['93 004 90180190 094,E $ 009L'93 00 90180150 884'8 $ 81746'93 OOZ 90/80/90 L96'L $ E146'94 009 90180190
j7t, 10 91. abed LOOZ1601 PeI!d E-1. }uewnooa Mbn-990j70-A0-Lo: eseO Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 17 of 44
05/10/06 500 $16.5800 $ 8,290 05/10/06 100 $16.5850 $ 1,658 05/10106 300 $16.5850 $ 4,975 05/11/06 500 $16.2795 $o. 05/11/06 500 $16.2795 $0 . 05/11/06 500 $16.2917 $o. 05/11/06 500 $16.2815 $ 0 *. 05/11/06 500 $16.0615 $0 * 05/11/06 300 $15.9795 $0* 05/11/06 700 $16.5000 $ 11,550 05/11/06 300 816.5000 $ 4,950 05/11/06 500 $16.1600 $ 8,080 05/11/06 200 $16.2000 $ 3,240 05/11/06 300 $16.2000 $ 4,860 05/11/06 500 $16.1900 $ 8,095 05/11/06 200 $15.9795 $ 3,196 05/11/06 500 $15.9325 $ 7,966 05/11/06 300 $15.9209 $ 4,776 05/11/06 200 815.9209 $ 3,184 05/12/06 500 $15.8795 $ 7,940 05/12/06 300 $15.9317 $ 4,780 05/12/06 200 815.9317 $ 3,186 05/12/06 500 $15.9295 $ 7,965 05/12/06 300 $15.8795 $ 4,764 05/12/06 200 $15.8795 $ 3,176 05/12/06 500 $15.8795 $ 7,940 05/12/06 300 $15.9095 $ 4,773 05/12/06 200 $15.9095 $ 3,182 05/12/06 500 $15.9095 $ 7,955 05/15/06 800 $15.2100 $ 12,168 05/15/06 200 $15.2100 $ 3,042 05/15/06 100 $15.6395 $ 1,564 05/15/06 200 $15.6395 $ 3,128 05/15/06 268 315.6395 $ 4,191 05/15/06 432 $15.6395 $ 6,756 05/16/06 420 $15.5817 $ 6,544 05/17/06 148 $15.4123 $ 2,281 05/17/06 432 $15.4123 $ 6,658 05/18/06 300 $16.0100 $ 4,803 05/18/06 200 $16.0100 $ 3,202 05/18/06 500 $16.0100 $ 8,005 05/18/06 500 $15.9600 $ 7,980 05/18/06 500 $15.8700 $ 7,935 05/18/06 300 $15.8933 $ 4,768 05/18/06 200 $15.9033 $ 3,181 05/18/06 100 $15.9033 $ 1,590 05/18/06 458 $15.9300 $ 7,296 05118/06 42 $15.9300 $ 669 05/18/06 400 $15.8950 $ 6,358 05/18/06 300 $15.5162 $ 4,655 05/18/06 268 $16.0295 $ 4,296 05/18/06 232 $16.0295 $ 3,719 05/18/06 400 $16.0339. $ 6,414 05/18/06 100 $16.0339 $ 1,603 05/18/06 400 $16.0395 $ 6,416 05118/06 500 $16.0395 $ 8,020 05118/06 100 $16.0395 $ 1,604 05/18/06 200 $15.9759 $ 3,195 05118/06 200 815.1553 $ 3,031 05/18/06 500 $15.1553 $ 7,578 05/18/06 200 $15.1483 $ 3,030 05118/06 200 $15.1483 $ 3,030 05118/06 100 $15.1483 $ 1,515 05119/06 58 $15.2500 $ 884 05/19/06 500 $15.2500 $ 7,625 05/19/06 442 $15.2500 $ 6,740 05/19/06 58 $15.1843 $ 881 ZZS'Z $ 009693 894 9014EI50 9917'£4 $ 4486'945 3178 9014£190 5Z9`Z $ 4486'94$ 994 90146190 998'9 $ 9688'945 0017 90/93/50 5b6'L $ 9688'945 009 90193/90 689'4 $ 9689'945 GM 90/93/90 Z£6'Z $ 0692'54$ 318 90/93/90 LZVZ $ 069£'44$ 8917 90/93/80 322'04 $ 969Li 1.$ 00L 90/1090 931717 S 969L't+4$ 008 90/173/90 69t7'4 $ 9689'1'4$ 004 90/173/90 L01717 S 9689'1745 002 90/173190 1017`tl S 9689173 002 90/173/90 L0t"i S 9689'-b4$ 002 90/12/90 839`04 S 9620'993 00L 90/13/90 3017 S 96£0'93 002 90/173/90 17LZ'Z4 $ 89L9'171$ 3178 90/173/90 £08'3 $ 99L913 894 90/173/90 099'174 $ 0099'1L$ 000' 4 90/173/90 1172'34 $ 0099'bl5 3178 90/173/90 942'3 $ 0099'1745 994 90/173/50 909`04 $ 6900'94$ 001 90112190 ZL9'£ $ 6800'945 983 90112190 036 $ 9629'174$ Z9 90/23/90 061'1 $ 9616'1715 009 901E3I90 080'2 $ 9662'91.5 003 90123190 039'17 $ 9662'91.5 002 90123190 099'L $ 0034'945 009 90112140 814'9 $ 00174'945 318 90/13/90 Z6£`Z $ 00174'93 894 90!12I90 969'L $ 0064'93 009 90123190 1794'8 $ 0010'94$ 31E 90!23190 48£'3 S 00L0'93 894 9010190 9L£`L $ 9641'174$ 009 90/33/90 9917'4 $ 9699'174$ 004 90133190 9L17'1. S 56171"14$ 004 90/33/90 008' 4 4 $ 9671'1'4$ 009 90/33/90 996'3 $ 9L38'174$ 003 9023190 L38'174 $ 9L38'11.$ 000'4 90/33/90 8417'17 $ 9L38''4$ 002 90/33190 618'04 $ 9L39173 001 90/33/90 811'17 $ 9L38'145 002 90/33/90 931'L $ 9678'1745 009 90133190 6417'34 $ 009L'14$ 3178 90/33/90 088'3 $ 0091'44$ 894 90/33I90 916`3 $ 9488'174$ 003 90/61./90 9817`4 $ 9488'1745 004 90/61./90 296'9 $ 9488'174$ 0017 90/61/90 tl9v't, $ 9488'174$ 002 90/64/90 9817' 4 $ 961'8'i 4$ 0017 9016 4190 17614 5 9686'1745 001 90/64/90 0L17'L S 9626'171.5 009 90/64/90 Z8i7`b S 9626145 002 90164/90 064` 4 S 1669173 004 90/64/90 0176'8 S 1668173 009 90/64/90 OLtr'b S 1668'174$ 008 90/64/90 100'9 S 00P9'M 2178 90/64/90 £4£'Z 9 00179'174$ 854 90/64/90 ZLb` 4 $ OOZL'14$ 004 9016P90 899'£ S 093L'17 4$ 313 90/64/90 LZE'3 5 0931'1745 891. 90/64/50 41.4`5 S 0034'94$ 31E 90/64/90 698'Z $ 0034'94$ 894 90/64/90 929 $ 2178v94$ Zb 90/64/90 945'4 $ £17817'54$ 004 90/64/90 999'4 $ 21781.'91$ 002 90/64/80 1.80'2 $ 8178 4'91.$ 003 90/64/90
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j7t, 10 OZ 96sd LOOZ1601 Pal! E-E }uewnooa Mbn-990j70-A0-Lo. eseO Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 21 of 44
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VV IO 9Z a6sd LOOZ/6041. PeI!d E-^E }uewnooa Mbn-990j70-AO-Lo: eseO 869'£ $ 006b'845 003 90103I60 LVG'S $ 00617'9I $ ODE 90/OZ/60 093'6 $ 0009'845 009 90/03I60 30£'6 S 91709'83 009 90/03/60 ZO£'6 $ 9b09'83 009 90/02/60 999'€ $ 2082'83 OOZ 90/64/60 b8b'9 $ &08Z'94$ ODE 90/64/60 £44'6 $ 0933'83 009 90/64/60 089'£ $ 966£'83 003 90/84/60 6ZS'S $ £4£ti'84$ ODE 90/84160 943'6 $ E4£17'845 009 90!84160. £42'6 $ 693b'84$ 009 90!84160 839'9 $ 6921'845 00£ 90!84160 1799'£ $ 17641.'845 OOZ 90/84/60 9£9`5 $ 661 '84$ 00£ 90/94/60 069`£ $ 6611.'93 002 90/84/60 9ZZ'6 $ 6617t7'83 009 90/94/60 299`9 $ ££L8'815 008 90/84/60 29L`E $ 9L£8'84$ 003 90/84/60 959`9 $ ££98'84$ 008 90/84/60 E91'£ $ 8948'84$ 003 90181!60 088'6 5 0099'848 009 90191/60 ZZO`£4 $ 0£09'84$ OOL 90/94/60 485`5 $ 0809'84$ 00£ 90/94/60 248'94 $ 1089'83 006 90/94160 998'4 $ 96L9'83 004 90/94/60 091'6 $ t'616'81$ 009 90/94/60 091'6 $ 17646'845 009 90/94/60 ZLL'£ $ 9L99'84$ 003 90/94/60 299'9 $ ££L8'84$ DOE 90/94/60 891'£ $ 48£8'84$ 003 90194/60 6.1'9 $ ££90'64$ 00£ 90/94/60 908'£ $ 3630'64$ OOZ 90194!60 99L'9 $ £864'64$ 00£ 90/94/60 u8'£ $ 2694'64$ DOZ 90/94160 b9L'9 $ 0084'64$ 00E 90/94/60 93b`£1. $ 0084'63 OOL 90/94/60 80L'6 S 4901.'63 009 90/14/60 488'£ $ 4901.'64$ 003 90/14/60 4176' 4 5 1760b'63 00 4 901' 4160 E9L'S $ 0013'645 00£ 90/17 4/60 909'6 $ 001Z'615 009 90/14/60 098'£ S 0092'63 002 90/174/60 836'£ $ 6ti49'61$ 003 901£4160 108`6 $ 61749'63 009 9018 4160 U6`£ $ 6V49'63 OOZ 901E4160 936'9 $ ££51'63 00£ 90183.160 Zt,6'£ $ 004L'63 002 90/81/60 L16`9 $ ££21'64$ 00£ 90181160 SE6'E $ 2699"645 DDZ 90/81/60 996'9 $ EE98'615 DOE 901£1160 1LL'94 $ 691L'615 008 90/34/60 4£Z'Z $ £882'645 944 90/44/60 899`£ $ 17608'645 484 90/44/60 993 4 5 1.608'63 99 90141/60 089'3 S 96L1763 981. 90/44/60 993' 4 5 96LV6 4$ 99 90/W60 689'3 $ b9L4'64$ 984 90!44160 06L'9 $ 17662'61$ 000 90/44/60 098'E $ 17662'645 002 90/44/60 0178'9 $ 199161$ 00£ 90141/60 1706'£ $ 84Z9'64$ 003 90/44/60 9178'9 $ 498164$ 00£ 90/44/60 049`6 $ 0033'645 009 90/44/60 17178'£ $ 0033'615 002 90/44/60 99L'9 $ 0022'645 00£ 90/44/60 5£9'6 $ OOL3'64$ 009 90/44/60
VV IO 6Z a6sd LOOZ/6041. PeI!d E-^E }uewnooa Mbn-990j70-A0-Lo: eseO Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 30 of 44
09/20/06 300 $18.3300 $ 5,499 09/20/06 200 $18.3300 $ 3,666 09/20/06 300 $18.1517 $ 5,445 09/20106 200 $18.1517 $ 3,630 09/20106 300 $18.1649 $ 5,449 09/20/06 200 $18.1649 $ 3,633 09/20/06 500 $18.1649 $ 9,082 09/20/06 300 $18.1767 $ 5,453 09/20/06 700 $18.1767 $ 12,724 09/21/06 500 $18.3025 $ 9,151 09/21/06 300 $18.3025 $ 5,491 09/21/06 200 $18.2892 $ 3,658 09/21/06 300 $18.2930 $ 5,488 09/21/06 200 $18.2930 $ 3,659 09/21/06 270 $18.2930 $ 4,939 09/21/06 172 $18.2768 $ 3,144 09/21/06 58 $18.2768 $ 1,060 09/21/06 442 $18.3800 $ 8,124 09/21/06 58 $18.3800 $ 1,066 09/21/06 300 $18.0217 $ 5,406 09/21/06 200 $18.0217 $ 3,604 09/21/06 300 $18.0161 $ 5,405 09/21/06 200 $18.0502 $ 3,610 09/21/06 300 $17.9839 $ 5,395 09/21/06 200 $17.9839 $ 3,597 09/21/06 300 $17.9961 $ 5,399 09/21/06 200 $17.9961 $ 3,599 09/22/06 400 $17.7200 $ 7,088 09/22/06 100 $17.7200 $ 1,772 09/22/06 500 $17.7468 $ 8,873 09/22/06 500 $17.7500 $ 8,875 09/22/06 500 $17.7500 $ 8,875 09/22/06 500 $17.6306 $ 8,815 09/22/06 200 $17.6395 $ 3,528 09/22/06 300 $17.6395 $ 5,292 09/22/06 200 $17.6395 $ 3,528 09/22/06 300 $17.6395 $ 5,292 09/22/06 500 $17.5995 $ 8,800 09/22/06 500 $17.6795 $ 8,840 09/22/06 500 $17.6817 $ 8,841 09/25/06 500 $17.8111 $ 8,906 09/25/06 300 $17.8111 $ 5,343 09125/06 100 $17.8111 $ 1,781 09/25/06 100 $17.7600 $ 1,776 09/25/06 400 $17.7600 $ 7,104 09/25/06 500 $17.5400 $ 8,770 09/25/06 100 $17.4969 $ 1,750 09/25/06 113 $17.4969 $ 1,977 09/25/06 100 $17.9799 $ 1,798 09/25/06 287 $17.5448 $ 5,035 09/25/06 300 $17.6261 $ 5,288 09/25/06 200 $17.6611 $ 3,532 09/25/06 300 $17.7161 $ 5,315 09/25/06 200 $17.7511 $ 3,550 09/25/06 500 $17.8583 $ 8,929 09/25/06 300 $17.8695 $ 5,361 09/25/06 200 $17.8695 $ 3,574 09/25/06 300 $17.8161 $ 5,345 09/25/06 200 $17.8511 $ 3,570 09/25/06 270 $17.7801 $ 4,801 09/25/06 172 $17.7801 $ 3,058 09/25/06 58 $17.8195 $ 1,034 09/25/06 442 $17.8195 $ 7,876 09/25/06 58 $17.8189 $ 1,033 09/25/06 400 $17.8189 $ 7,128 09/25/06 100 $17.8394 $ 1,784 09/28/06 100 $18.3499 $ 1,835 18b`6 S 8916'83 009 90191.101. 06S'9 $ 9486'945 Zbb 901£4101 401.14 $ 91.86'945 89 901£1101 448'£ $ Z690'61.$ 00Z 90161.104 LEL'S $ SSOL'6L$ 009 901£4104 8tiL'2 $ 0094'64$ 006 90/91/04 Z£8'£ $ 0091"61.$ OOZ 90/61/04 089'6 $ 0094'645 009 901£4104 £Lt9 $ 17694'645 Zvi? 901Z1.101. ZLL'L $ 17691'645 89 901Z1.10L 17 '8 $ 8201'61.5 Zl* 90/Z4I01. 804'4 $ 8604'63 89 901ZL/O1. 909'6 $ 17600'64$ 009 901ZL101 909'6 $ 17600'64$ 009 90/24/04 OLb'6 $ 176£6'94$ 009 901ZL106 ZBS`£ $ 8496'64$ 00Z 90124!01 L1L'9 $ 8494"64$ 002 90IZ4l01. 01.b'6 S 00Z8'84$ 009 90/41/04 999'6 S 0044'645 009 90/44/04 999'6 $ 001.1'63 009 90/44/04 0179'6 $ P6LZ'63 009 90/04/04 0179'6 $ b6LZ'6 L$ 009 9010 LIO L Zb9'6 $ 092Z'61.5 009 90/04/06 Zti9'6 $ 099Z'61.5 009 90/01/04 099'6 $ 17092'645 009 90/01./04 099'6 $ V09Z'645 009 90/04/04 949'9 $ 9ZLZ'6l$ at 90/04/04 944'4 5 00ZZ'64$ 89 90/04/04 9617'8 $ 00ZZ'61.5 Zt+4 90/04/04 ZL1.'1. $ 0084'67.5 89 90/04/04 9LJ7'9 $ 008163 Zbb 90/0 LIO L. LLL'L $ 99261-$ 89 90/04/06 8Z9`6 $ 999Z'63 009 90/04/01. 91.L'£ $ 46L9'81.$ 002 90/90/06 9L9'9 S 6989'84$ 002 90/990/01. E6Z'6 S 6999'8 1.5 009 90/90/04 9ZZ'6 S 176W81-5 009 90/90/04 0£Z'6 S 0091'81.5 009 90/90104 OZZ'6 S 001717 SL$ 009 90/90/04 OZZ'6 S 00174'845 009 9019010L ti£b'S $ LZLL'81.$ 00£ 901170101 1.1.9'4 $ 4244'84$ 00L 90/170/01- 448'1. $ 4244'81.$ 004 90/170/04 86 1.'9 $ LZL1.'86$ L9Z 90/170/01 448'4 $ 1.Z1.1.'83 001. 90/170/04 Lb0'Z $ LZII'8L$ ELL 901170!04 06L'8 $ 0099'L1.5 009 901£0101 06L'8 $ 0089'L15 009 901£0104 Z8L'L $ L8Z9'LL$ 00L 90/0/01. ZL6'8 $ L£Z8'LLS 009 90/ZOIOL 6ZVL S L£Z9'LL$ 0017 90/Z0/0L 258'8 S LP0L'L L$ 009 90/20/01 258'8 5 L1OL'L1.S 009 90/20/01 968' 1. 5 01.9£'8 L$ 001- 90/62/60 9£8`4 $ 049€'84$ 004 90/62/60 961'2 5 1-91.6'81.5 006 90/6Z160 E1.3'6 5 093181.5 009 90/62/60 466'8 $ L 1.86'L L$ 009 90/83l60 966'9 $ LL66'LL$ 009 90/93/60 966'9 $ 9066'L1.5 009 90/93/60 9L6'9 $ 00961 L$ 009 90/93/60 81.9'E $ 0060'845 003 90/93l60 L317'9 $ 0060'845 006 90/83160 OLL'6 $ 0033'84$ 009 90/92/60 991'6 $ 0066'83 009 90/82/60 66V9 $ 0022'83 006 90I83160 O£8' L $ 0002'83 001. 90/93/60
j7t, 10 LE 96sd LOOZ1601 Pal! E-^E }uewnooa Mbn-990j70-AD-Lo: eseO Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 32 of 44
10/16/06 500 $18.9538 $ 9,477 10117106 500 $18.9400 $ 9,470 10/17/06 500 $18.9400 $ 9,470 10/17/06 100 $19.0499 $ 1,905 10/17/06 200 $18.9600 $ 3,792 10/17/06 200 $18.9584 $ 3,792 10/17/06 500 $19.0438 $ 9,522 10/17/06 300 $19.0561 $ 5,717 10/17/06 200 $19.0794 $ 3,816 10/17/06 500 $19.1060 $ 9,553 10/17/06 200 $19.0695 $ 3,814 10/17/06 300 $19.0994 $ 5,730 10/17/06 300 $19.0761 $ 5,723 10/17/06 200 $19.1110 $ 3,822 10/17/06 500 $19.1738 $ 9,587 10/25/06 500 $18.8899 $ 9,445 10/25/06 500 $18.6695 $ 9,335 10/25/06 100 $18.6594 $ 1,866 10/25/06 200 $18.6594 $ 3,732 10/25/06 200 $18.6594 $ 3,732 10/26/06 500 $18.5100 $ 9,255 10/26/06 500 $18.5100 $ 9,255 10/26/06 500 $18.7795 $ 9,390 10/26/06 500 $18.7894 $ 9,395 10/26/06 500 $18.6895 $ 9,345 TOTAL $ 2,882,344 $ 2,895,651
Excess of Cost of Purchases Over Proceeds from Sales = $ 13,307
TOTAL LOSS= $ 13,307
indicates sale of shares purchased prior to class period, on a first-in, first-out basis. (At the start of the class period , the client owned 33,000 shares purchased at earlier dates.) Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 33 of 44
Patricia PetronisA/C #1 - Transactions in Nuvelo Stock 115106 through 1218106
Date No. Shares Price per Cost of No . Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
03127/06 100 $16.2019 $ 0 * 03/27/06 100 $16.1995 $0* 04103/06 200 $17.5094 $ 0 * 04/03/06 200 $17.5188 $ 3,504 04/26/06 100 $16.2267 $0. 04/27/06 500 $15.9127 $ 0 * 04/27/06 200 $16.6494 $0. 05/01/06 300 $16.0495 $0 * 05/02/06 200 $15.5495 $0* 05/12/06 400 $15.9095 $0* 05/18/06 200 $15.5495 $ 0 * 05/18/06 200 $15.3595 $ 0 05/19/06 300 $14.6662 $ 0 * 05/19/06 200 $14.8995 $ 0 * 06/05/06 300 $16.4697 $ 0 * $0. 06/14/06 300 $15.2222 07/07/06 176 $17.1275 $ 3,014 07/07/06 24 $17.1275 $ 411 07/20/06 103 $17.1033 $ 1,762 07/20/06 173 $17.1033 $ 2,959 07/20/06 24 $17.1033 $ 410 07/21/06 200 $16.6495 $ 0 * 07/25/06 500 $17.1294 $ 0 * $0* 07/25/06 500 $16.9794 07/25/06 76 $17.1199 $ 1,301 07/25/06 2 $17.1199 $ 34 07/25/06 200 $17.1199 $ 3,424 07/25/06 100 $17.1199 $ 1,712 07/25/06 50 $17.1199 $ 856 07/25/06 72 $17.1199 $ 1,233 07/25/06 428 $16.8999 $ 7,233 07/25/06 72 $16.8999 $ 1,217 $0. 07/26/06 500 $17.0294 07/26/06 428 $16.7599 $ 7,173 07126/06 72 $16.7599 $ 1,207 07/26/06 76 $16.7314 $ 1,272 07/27/06 500 $16.5295 $ 0 $0* 07/27/06 500 $16.5795 $0* 07/27/06 100 $16.5995 07/27/06 167 $17.0598 $ 2,849 07127106 135 $17.0300 $ 2,299 07/27/06 100 $17.0300 $ 1,703 07/27/06 98 $17.0300 $ 1,669 07/27/06 2 $17.0599 $ 34 07/27/06 98 $17.0599 $ 1,672 07/27/06 2 $16.9700 $ 34 07/27/06 100 $16.9700 $ 1,697 07/27/06 298 $16.9700 $ 5,057 07/27/06 202 $16.8430 $ 3,402 07/27/06 231 $16.8430 $ 3,891 07/27/06 269 $16.5667 $ 4,456 07/27/06 231 $16.5667 $ 3,827 07/27/06 200 $16.8499 $ 3,370 07/27/06 69 $16.8393 $ 1,162 07/27/06 271 $16.8393 $ 4,563 07/27/06 227 $16.8940 $ 3,835 07/28/06 500 $17.0394 $0* 07/28/06 500 $17.0594 $0 * $0* 07/28/06 476 $16.9284 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 34 of 44
08/01/06 500 $16.6795 $0. 08/01/06 500 $16.6899 $ 8,345 08/02/06 500 $16.3717 $ 0 * 08/02/06 500 $16.4795 $0* 08/02/06 2 $16.9199 $ 34 08/02/06 400 $16.9199 $ 6,768 08/02/06 98 $16.9199 $ 1,658 08/02/06 102 $16.6776 $ 1,701 08/02/06 98 $16.6776 $ 1,634 08102/06 102 $16.7133 $ 1,705 08/02106 198 $16.7133 $ 3,309 08/03/06 300 $16.6124 $0* 08/03/06 100 $16.3894 $0* 08/03/06 100 $16.3195 $0* 08/03/06 200 $16.3395 $0 * 08/03/06 300 $16.3073 $ 0' 08/03/06 102 $16.3179 $ 1,664 08/03/06 398 $16.3179 $ 6,495 08/04/06 500 816.1795 $ 0 08/04/06 500 $16.1295 $ 0 * 08/04/06 500 $16.1595 $0* 08/04/06 100 $16.0717 $0 * 08/04/06 102 $16.5404 $ 1,687 08/04/06 96 816.5404 $ 1,588 08/04/06 302 $16.5000 $ 4,983 08/04/06 102 $16.2199 $ 1,654 08/04/06 200 $116.2199 $ 3,244 08/04/06 198 $16.2199 $ 3,212 08/04/06 200 $16.0292 $ 3,206 08/04/06 102 $16.0633 $ 1,638 08/04/06 198 $16.0633 $ 3,181 08/08/06 300 $16.2362 $0 * 08/08/06 200 $16.2711 $ 0 08/08/06 300 $16.1862 $ 0 * 08/08/06 100 $16.1196 $ 0 * 08/08/06 302 $16.1711 $ 4,884 08/08/06 198 $16.1711 $ 3,202 08/08/06 2 $16.1192 $ 32 08/08/06 198 $16.1192 $ 3,192 08/08/06 102 $16.1533 $ 1,648 08/08/06 100 $16.1533 $ 1,615 08/08/06 98 $16.1533 $ 1,583 08/16/06 102 $17.8275 $ 1,818 08/16/06 98 $17.8275 $ 1,747 08/16/06 300 $17.6333 $ 5,290 08/18/06 24 818.6845 $0* 08/18/06 200 $18.6845 $ 3,737 08/18/06 176 $18.6845 $ 3,288 08/18/06 24 $18.8207 $ 452 08/18/06 103 818.8207 $ 1,939 08/18/06 2 $19.1399 $ 38 08/18/06 498 $19.1399 $ 9,532 08/18/06 102 $18.8399 $ 1,922 08/18/06 398 $18.8399 $ 7,498 08/18/06 102 $18.5199 $ 1,889 08/18/06 398 $18.5199 $ 7,371 08/21/06 173 $18.4416 $ 3,190 08/21/06 24 $18.3995 $ 442 08/21/06 76 $18.3995 $ 1,398 08/21/06 2 $13.5100 $ 27 08/22/06 2 $23.8500 $ 48 08/24/06 200 $19.3995 $ 3,880 09/01/06 100 $20.4794 $ 2,048 09/01/06 50 $20.3930 $ 1,020 669'2 $ 17619'845 861. 9015Z/01- Z88`. $ 6618'86$ 004 9016Z10 I. 09L`96 $ 861L'81.$ 00014 90/VZ/o 4 9£9`6 $ 869Z'61.$ 009 90/91./04 m, 1. $ 176ZZ'6E$ Z0I. 90181.10 4 9179'€ $ 176ZZ'61.$ 00 9019LIOL L08'8 $ 176ZZ'61.$ 964 90/91/04 t'6L'€ $ 1696'84$ OOZ 9024101 Z69`6 $ 1.£81.61.$ 009 90104101. 996`4 $ b6LZ'64$ ZOI. 901UI01 ZZ9'S $ 176LZ'61.5 ZOE 90101lo 1. 498`1 $ 176LZ'63$ 96 9010YI06 'bZ6'9 S 661.Z'81$ 09€ 90/82/60 99VZ S 66LZ'81$ OU 9018ZI60 1788`. $ 9b86'L6$ ZOL 90/82/60 L9 E'L $ 9186'L 4$ 86£ 90I8Z160 9£8'4 $ 1.986'L L$ Z06 90/42/60 199'£ $ 4986'1.4$ 864 90/62/60 9L9'4 $ 17682'86$ Z01. 9018 6160 Z08'L .$ 1768£'86$ 96 90/8 6160 91.8' 1. $ 901.1'84$ Z01 9018 6160 17091. $ 90W91.$ 86 9018 6160 1.18'1 $ 59Zti'86$ 0017 9018 1.160 L9L'E $ £€28'86$ 00 90/91./60 £88`4 $ E£E8'84$ 1004 9019 1.160 09L'£ $ Z66L'8 E$ OOZ 90/91./60 OE8's $ 661'161.$ 002 9019 4160 9L9'6 $ 66171'665 009 90/%/60 91.6' 6 5 66171'61.5 001. 90/9 1.160 088'2 $ 66171'64$ 00Z 90/91./60 LE $ 81749'81.$ Z 90/9 4160 108'6 $ 81769'84$ 009 90/91./60 9ZZ'b $ 91749'84$ LZZ 9019 4160 91.0'9 $ 811.9'96$ 4LZ 9015 4160 SOE`6 $ 17618'84$ 69 90/91./60 9LL`£ $ 176L8'8L$ 002 9019 6160 69E`b $ 1'618'84$ 6£Z 90/91./60 826`9 $ 6691'6 L$ 006 MUM 916`4 $ 669L'6 L$ 004 9015 6160 9L6'L $ 669L'6i.$ 001. 901£ 1.160 966'6 $ 1 M,6 6$ 009 9018 4160 992,9 $ 88L9'615 69Z 901£ 6160 ZZ9,17 $ 98L9'6!.$ 6£Z MUM 9176,E $ 20£9'665 ZOZ 901E W60 OZ8'9 $ 2085'66$ 86Z MUM 9166 $ 176171'63 OOL 90/80/60 6£ $ 17661'61$ Z 901L0160 646'4 $ 17661'6L$ 96 901LO160 6£ $ 966£'6 6$ Z 901LO160 106`1. $ 966£'64$ 96 901L0160 6N'4 $ 968£'6 4$ 00 E. 901LO160 L 1.9`2 $ ZLBE'6 4$ 9£ E. 90/10/60 8£Z`£ $ ZL8£'64$ L96 901LO160 £L17`b $ ZLBE'64$ 9L 901LO/60 96£'6 $ ZL8£'6L$ ZL 901L0/60 969'L $ 9L£L'66$ 0017 90/90/60 1L6' 4 $ 9L£L'6!.5 001 90/90/60 61.0'2 $ 668 6'02$ 00 4 90/90/60 190'9 $ 668 4'02$ 00£ 90/90/60 6WZ $ 668102$ col. 90/90/60 998'8 5 91.29'66$ 8Z17 90/90/60 90t"E $ 9129'66$ ZL 90/90/60 9178`8 $ 16617'645 826 90/90/60 '7017`4 $ 17661'6!.$ ZL 90/90/60
j7j1o 9C a6sd LOOZ/6041. Pal! E-^E }uewnooa Mbn-990j70-AD-Lo: eseO Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 36 of 44
10/25/06 302 $18.6794 $ 5,641 10/26/06 198 $18.7994 $ 3,722 10/26/06 2 $18.7994 $ 38 10/26/06 198 $18.6961 $ 3,702 10/26/06 102 $18.6961 $ 1,907 10/27/06 100 $18.4795 $ 1,848 10/30/06 98 $18.5294 $ 1,816 10/30/06 102 $18.5294 $ 1,890 10/30/06 98 $18.5594 $ 1,819 10/30/06 300 $18.5594 $ 5,568 10/30/06 2 $18.5594 $ 37 11/03/06 498 $17.5829 $ 8,756 11/03/06 102 $17.5829 $ 1,793 11/03/06 400 $17.5749 $ 7,030 11/14/06 398 $19.7294 $ 7,852 11/14/06 102 $19.7294 $ 2,012 11/14/06 398 $19.7794 $ 7,872 11114/06 2 $19.7794 $ 40 11/14/06 100 $19.7794 $ 1,978 11/14/06 500 $19.6399 $ 9,820 11/14/06 500 $19.4199 $ 9,710 11/15/06 500 $20.1898 $ 10,095 11/20/06 300 $19.6760 $ 5,903 11/20/06 100 $19.7494 $ 1,975 11/20/06 100 $19.7494 $ 1,975 11/20/06 300 $19.7532 $ 5,926 11/20/06 200 $19.7200 $ 3,944 11/21/06 400 $19.7294 $ 7,892 11/21/06 500 $119.7294 $ 9,865 11/21/06 100 $19.7294 $ 1,973 11/21/06 500 $19.9299 $ 9,965 11/21/06 500 $19.8099 $ 9,905 11/28/06 100 $18.9495 $ 1,895 11/29/06 300 $19.4994 $ 5,850 111129106 200 $19.4994 $ 3,900 11/29/06 100 $19.4794 $ 1,948 11/29/06 500 $19.1599 $ 9,580 11/30/06 500 $19.1895 $ 9,595 11/30/06 200 $19.1895 $ 3,838 11/30/06 200 $19.1895 $ 3,838 11/30/06 100 $19.1895 $ 1,919 11/30/06 500 $19.5799 $ 9,790 11/30/06 500 $19.3999 $ 9,700 TOTAL $ 408,009 $ 281,585
Excess of Cost of Purchases Over Proceeds from Sales = $ (126,423)
Less Settle -Out Value"* of 7,700 shares held at End of Class Period= $ 27,732
TOTAL LOSS = $ (98,692)
* Indicates sale of shares purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 12,900 shares purchased at earlier dates.) ** Settle-out value (average closing price 12111106 - 03/08/07) = $3.6015 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 37 of 44
Frank PetronisAIC #1 - Transactions in Nuvelo Stock 115106 through 1218106
Date No. Shares Price per Cost of No. Shares Price per Proceeds of I Purchased Share Purchase Sold Share Sale
11/01/06 100 $17.8394 $0* 11/01/06 400 $17.8395 $0 * 11/01/06 500 $17.8194 $0. 11/01/06 200 $18.5699 $ 3,714 11101/06 200 $18.5700 $ 3,714 11/01/06 600 $18.3499 $ 11,010 11/01/06 1,000 $18.3500 $ 18,350 11/01/06 500 $18.3100 $ 9,155 11/02106 500 $18.0095 $0. 11102!06 500 $18.0395 $0. 11/02/06 500 $18.0694 $0* 11/02106 700 $17.9795 $0 . 11102!06 100 $17.7400 $ 1,774 11/02106 300 $17-7500 $ 5,325 11/02/06 100 $17.7500 $ 1,775 11/02/06 383 $17.7200 $ 6,787 11/02/06 117 817.6600 $ 2,066 11/03/06 300 $17.9095 $ 0 11/03/06 500 $17.5595 $0* 11/03/06 300 817.5995 $0 * 11/03106 500 $17.6499 $ 8,825 11/03/06 500 $17.5499 $ 8,775 11/06/06 493 $17.3494 $0* 11/06/06 507 $17.3495 $0. 11/06/06 700 $17.2394 $0. 11/06/06 300 $17.2294 $0 * 11/06/06 500 $17.2294 $0' 11/06/06 500 $17.1399 $ 8,570 11/06/06 300 $17.1400 $ 5,142 11/06/06 400 $17.2400 $ 6,896 11/06/06 100 $17.1600 $ 1,716 11/07/06 500 $17.8695 $ 0* 11/07/06 500 $17.8895 $0* 11/14/06 500 $19.4794 $ 0 11/14/06 500 $19.5594 $ 0 " 11/14/06 1,000 $19.5199 $ 19,520 11/14!06 500 $19.3999 $ 9,700 11/14/06 500 $19.2999 $ 9,650 11/16/06 100 $19.9693 $0* 11/16/06 800 $20.1699 $ 16,136 11!16106 200 $20.1499 $ 4,030 11/16/06 650 $20.1499 $ 13,097 11/16/06 150 $20.1499 $ 3,022 11/16/06 300 $20.1500 $ 6,046 11/17/06 1,000 $19.8794 $0* 11/21/06 500 $19.7394 $0 * 11/21/06 137 $19.9399 $ 2,732 11/21/06 500 $19.9200 $ 9,960 11/21/06 863 819.9100 $ 17,182 11/22/06 1,000 819.5594 $0* 11/22/06 1,000 $19.5594 $0. 11/22/06 500 819.5395 $0* 11122106 50 $19.5900 $ 980 11/22106 550 $19.5900 $ 10,775 11/22106 489 $19.4400 $ 9,506 11/22106 400 $19.4700 $ 7,788 11/22/06 11 $19.5300 $ 215 TOTAL $ 243,931 $ -
Excess of Cost of Purchases Over Proceeds from Sates = $ (243,931)
Less Settle-Out Value"' of 53,675 shares held at End of Class Period = $' 46,459
TOTAL LOSS = $ (197,472)
* Indicates sale of shares purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 17,000 shares purchased at earlier dates.) ** Settle-out value (average closing price 12!11106 - 03108107) = $3.6015 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 38 of 44
Patricia Petronis A/C #2 - Transactions in Nuvelo Stock 115106 through 1218106
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
01/19/06 200 $15.8797 $ 3,176 01/19/06 50 $16.4390 $ 822 02/15/06 165 $18.2448 $ 3,010 02/15/06 100 $18.2449 $ 1,824 02/15/06 100 $18.2449 $ 1,824 02/15/06 35 $18.2448 $ 639 02/15/06 75 $18.0498 $ 1,354 02/15/06 100 $18.0499 $ 1,805 02/15/06 400 $18.0499 $ 7,220 02/15/06 25 $18.0500 $ 451 03123/06 100 $15.9548 $ 1,595 03/23/06 100 $15.9549 $ 1,595 03/23/06 100 $15.9749 $ 1,597 03/23/06 100 $15.9749 $ 1,597 05/23/06 200 $15.2431 $ 3,049 05/23/06 25 $15.2632 $ 382 08/22/06 475 $18.0500 $0- TOTAL $ 31,942 $ -
Excess of Cost of Purchases Over Proceeds from Sales = $ (31,942)
Less Settle-Out Value" of 1,875 shares held at End of Class Period = $ 6,753
TOTAL LOSS = $ (25,189)
* Indicates sale of shares purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 2,900 shares purchased at earlier dates.) ** Settle-out value (average closing price 12/11106 - 03108107) = $3.6015 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 39 of 44
Frank Petronis A/C #2 - Transactions in Nuvelo Stock 115106 through 1218106
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
07/27/06 100 $16.7000 $ 0 * 07/27/06 500 $16.6000 $ 0 07/27/06 400 $16.5500 $ 0 07/27/06 100 $16.5500 $ 0 07/27/06 500 $16.5468 $ 8,273 07/27/06 33 $16.8200 $ 555 07/27/06 100 $16.8200 $ 1,682 07/27/06 200 $16.8200 $ 3,364 07/27/06 100 $16.8200 $ 1,682 07/27/06 100 $16.8500 $ 1,685 07/27/06 27 $16.8500 $ 455 TOTAL $ 17,696 $ -
Excess of Cost of Purchases Over Proceeds from Sales = $ (17,696)
Less Settle-Out Value** of 1,060 shares held at End of Class Period = $ 3,818
TOTAL LOSS = $ (13,879)
* Indicates sale of shares purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 12,040 shares purchased at earlier dates.) ** Settle-out value (average closing price 12/11/06 - 03/08/07) = $3.6015 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 40 of 44
Frank Petronis A/C #3 - Transactions in Nuvelo Stock 115106 through 12/8/06
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
07/27/06 100 $16.8500 $ 1,685 07/27/06 270 $16.8100 $ 4,539 07/27/06 70 $16.8100 $ 1,177 07/27/06 200 $16.8000 $ 3,360 07/27/06 200 $16.9700 $ 3,394 07/27/06 200 $16.9700 $ 3,394 07/27/06 100 $16.9600 $ 1,696 07/27/06 133 $17.0300 $ 2,265 07/27/06 33 $17.0300 $ 562 07/27/06 67 $17.0300 $ 1,141 07/27/06 100 $17.0300 $ 1,703 07/27106 167 $17.0000 $ 2,839 08/22/06 200 $18.8300 $ 0 08/23/06 200 $19.1600 $ 3,832 08/23/06 300 $19.1600 $ 5,748 08/23/06 500 $19.2200 $ 9,610 08/23/06 200 $19.2199 $ 3,844 08/23/06 300 $19.2199 $ 5,766 08/23/06 1,000 $12.5000 $ 12,500 08/24/06 1,000 $12.5000 $ 12,500 08/24/06 400 $19.1000 $ 7,640 08/24/06 100 $19.1000 $ 1,910 08/24/06 100 $19.0700 $ 1,907 08/24/06 100 $19.0700 $ 1,907 08/24/06 100 $19.0700 $ 1,907 08/24/06 100 $19.0700 $ 1,907 08/24/06 100 $19.0700 $ 1,907 08/24/06 100 $19.0700 $ 1,907 08/24/06 100 $19.0700 $ 1,907 08/24/06 100 $19.0600 $ 1,906 08/24/06 100 $19.0600 $ 1,906 08/24/06 100 $19.0600 $ 1,906 08/24/06 200 $19.1300 $ 3,826 08/24/06 200 $19.1300 $ 3,826 08/24/06 200 $19.1300 $ 3,826 08/24/06 200 $19.1300 $ 3,826 08/24/06 100 $19.1300 $ 1,913 08/24/06 100 $19.1300 $ 1,913 10/13/06 78 $19.2900 $ 0 10/13/06 22 $19.2900 $ 0 10/13/06 900 $19.2900 $ 0 10/13/06 1,000 $19.2936 $ 0 10/13/06 1,000 $19.2710 $ 0 10/13/06 500 $19.2000 $ 9,600 10/13/06 34 $19.1600 $ 651 10/13/06 366 $19.1600 $ 7,013 10/13/06 100 $19.1600 $ 1,916 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 41 of 44
10/13/06 558 $19.2376 $ 10,735 10/13/06 442 $19.2500 $ 8,509 TOTAL $ 167,724 $
Excess of Cost of Purchases Over Proceeds from Sales = $ (167,724)
Less Settle-Out Value** of 9,640 shares held at End of Class Period = $ 34,718
TOTAL LOSS = $ (133,006)
* Indicates sale of shares purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 25,000 shares purchased at earlier dates.) ** Settle-out value (average closing price 12/11/06 - 03/08/07) = $3.6015 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 42 of 44
Frank Petronis A/C #4 - Transactions in Nuveto Stock 115106 through 1218106
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase ] 11 Sold Share Sale
01/05/06 241 $7.5085 $ 1,810 01/05/06 259 $7.5085 $ 1,945 01105/06 400 $7.5085 $ 3,003 01/05/06 500 $7.5085 $ 3,754 01/05/06 600 $7.5085 $ 4,505 01/06/06 2,900 $7.5058 $ 21,767 01/09/06 3,100 $7.5054 $ 23,267 01/10/06 700 $7.5242 $ 5,267 01/10/06 967 $14.1468 $ 13,680 01/10/06 1,000 $14.6070 $ 14,607 01/10/06 2,000 $7.5085 $ 15,017 01/13/06 3,000 $7.5056 $ 22,517 01/17/06 100 $15.2500 $ 1,525 01/17/06 1,000 $14.9470 $ 14,947 01/20/06 200 $15.8700 $ 3,174 01/20/06 533 $15.8690 $ 8,458 01/24/06 241 $15.0804 $ 3,634 01/24/06 259 $15.0695 $ 3,903 01/24/06 400 $15.1221 $ 6,049 01/24/06 500 $15.0365 $ 7,518 TOTAL $ 159,242 $ 21,104
Excess of Cost of Purchases Over Proceeds from Sales = $ (138,138)
Less Settle-Out Value* of 16, 100 shares held at End of Class Period = $ 57,984
TOTAL LOSS = $ (80,154
* Settle-out value (average closing price 12111/06 - 03/08/07) = $3.6015 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 43 of 44
Frank Petronis A/C #5 - Transactions in Nuvelo Stock 115106 through 1218/06
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
10/31/06 3,000 $12.4000 $0* 10/31/06 1,000 $18.6000 $ 18,600 TOTAL $ 18,600 $ -
Excess of Cost of Purchases Over Proceeds from Sales = $ (18,600)
Less Settle-Out Value** of 1,000 shares held at End of Class Period = $ 3,602
TOTAL LOSS = $(14,999)
* Indicates sale of shares purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 3,000 shares purchased at earlier dates.) ** Settle-out value (average closing price 12/11/06 - 03108107) = $3.6015 Case 3:07-cv-04056-VRW Document 31-3 Filed 11/09/2007 Page 44 of 44
Frank Petronis A/C #6 - Transactions in Nuvelo Stock 115106 through 12/8/06
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
01/06/06 1,000 $7.5170 $ 7,517 01/09/06 400 $13.6374 $ 5,455 01/30/06 600 $7.5283 $ 4,517 02/01/06 1,000 $12.5170 $ 12,517 02/02/06 400 $16.7175 $ 6,687 TOTAL $ 36,693 $
Excess of Cost of Purchases Over Proceeds from Sales = $ (36,693)
Less Settle-Out Value* of 3,400 shares held at End of Class Period = $ 12,245
TOTAL LOSS = $ (24,448)
* Settle-out value (average closing price 12/11/06 - 03108107) = $3.6015 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 1 of 17
EXHIBIT C /2007 Page 2 of 17 Case 3 :07-cv-04056-VRW Document 31-4 Filed 11/09
NUVELO, INC. CERTIFICATION PURbSUANT TO THE FEDERAL SECURITTFS LAWS
Todd A. and Amy Stephens ("Plaintiffs"), duly swear and say, as to the claims asserted under the federal securities laws, that:
I , Plaintiffs have reviewed a complaint against Nuvelo, inc. and certain of its officers, and Plaintiffs approve ofits contents, and authorize their selected counsel, Berger & Montague, P.C. to file a complaint and/or lead plaintiff papers on their behalf.
2. Plaintiffs did not purchase the security that is the subject ofthis action at the direction of its counsel or in order to participate in this private action.
3. Plaintiffs are willing to serve as representative plaintiffs on behalf of the class, including providing testimony at deposition and trial, if necessary.
4. Plaintiffs' transactions in the securities of Nuvelo, Inc. between and including January 5, 2006 through December 8, 2006, inclusive (the "Class Period"), are as follows;
Securities Purchased/Sold Date of Purchase/Sale Price per Security
See attached schedule
5. Plaintiffs have not sought to serve as class representatives in any other action filed tinder the United States federal securities laws in. the past three (3) years preceding the date on which this certification is signed.
6. Plaintiff's have not accepted and will not accept any payment for serving as representative plaintiffs on behalf of the class beyond their pro rata share of any recovery, or as ordered or approved by the court, including any award for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.
We declare under penalty of erjury under the laws of the United States that the foregoing is true and correct. Executed this day of 2007.
Ey: ( - Todd A. Stephens
By: Array A. ephens 1901 Hamilton Street Allentown, PA 18104 Tel, (610) 432-4155
4!3507_03_wpd Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 3 of 17
Todd Stephens A/C #1 - Transactions in Nuvelo Options 115106 through 1218106
Option Date No. Contracts Price per Cost of No. Contracts Price per Proceeds of Type Purchased Contract Purchase Sold Contract Sale
ZZCAW 03/21/06 10 $4.1000 $0* CDQGD 03/21/06 10 $1.1500 $ 1,150 CDQDC 03/21/06 10 $2.4500 $ 2,450 CDQGD 03/21/06 10 $1.1500 $ 1,150 CDQJD 03/21/06 10 $1.9000 $ 1,900 CDQJD 03/21/06 10 $1.9000 $ 1,900 ZZCAW 03/24/06 25 $3.4000 $0* CDQEC 03/28/06 5 $2.0500 $ 1,025 CDQEC 04/06/06 10 $3.2000 $ 3,200 CDQGW 04/06/06 10 $2.1000 $ 2,100 CDQDC 04/06/06 10 $2.9500 $ 2,950 CDQGW 04/17/06 5 $1.4500 $ 725 CDQGW 04/17/06 5 $1.4500 $ 725 ZZCAW 04/19/06 10 $4.1000 $ 0 '` ZZCAW 04/20/06 25 $4.0000 $ 0 * ZZCAW 04/20/06 10 $4.0000 $ 0 * ZZCAW 04/21/06 5 $3.9000 $ 0 * CDQGC 04/21/06 10 $3.6000 $ 3,600 CDQGV 04/27/06 5 $4.6000 $ 2,300 CDQJD 04/27/06 20 $1.4500 $ 2,900 CDQFC 04/27/06 10 $2.4500 $ 2,450 ZZCAW 04/27/06 5 $3.4000 $ 1,700 ZZCAW 04/27/06 5 $3.4000 $ 1,700 ZZCAW 04/27/06 5 $3.5000 $ 1,750 CDQGV 04128/06 20 $4.4000 $ 8,800 CDQFC 05/01/06 10 $2.1500 $ 2,150 ZZCAW 05/04/06 5 $3.2000 $ 1,600 CDQEC 05/04/06 5 $1.2000 $ 600 CDQGV 05/05/06 5 $5.2000 $ 2,600 CDQEC 05/05/06 10 $1.4000 $ 1,400 CDQGW 05/05/06 10 $1.4500 $ 1,450 CDQGW 05/05/06 5 $1.6000 $ 800 CDQFC 05/05/06 10 $2,0000 $ 2,000 CDQFC 05/05/06 10 $2.5000 $ 2,500 CDQGV 05/08/06 10 $4.8000 $ 4,800 CDQGV 05/08/06 5 $4.8000 $ 2,400 CDQGW 05/08/06 5 $1.2500 $ 625 CDQGW 05/08/06 5 $1.2500 $ 625 CDQGV 05/09/06 5 $4.6000 $ 2,300 ZZCAW 05/09/06 5 $3.7000 $ 1,850 ZZCAW 05/11/06 5 $3.5000 $ 1,750 ZZCAW 05/12/06 5 $3.3000 $ 1,650 ZZCAW 05/12/06 5 $3.3000 $ 1,650 CDQAW 05/19/06 20 $2.7500 $ 5,500 CDQAW 05/19/06 10 $2.6500 $ 2,650 CDQGW 05/19/06 20 $0.5000 $ 1,000 CDQGW 05/19/06 5 $0.5000 $ 250 CDQAW 05/19/06 5 $2.9500 $ 1,475 CDQAW 05/19/06 5 82.8000 $ 1,400 CDQAW 05/19/06 5 $2.8000 $ 1,400 LWVAW 05/19/06 9 $4.3000 $ 3,870 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 4 of 17
LWVAW 05/19/06 1 $4.3000 $ 430 LWVAW 05/19/06 4 $4.5000 $ 1,800 LWVAW 05/19106 5 $4.5000 $ 2,250 LWVAW 05/19/06 1 $4.5000 $ 450 LWVAW 05/22/06 4 $4.3000 $ 1,720 CDQGC 05/31/06 10 $2.1500 $ 2,150 ZZCAD 05/31/06 5 $5.9000 $ 2,950 ZZCAD 05/31/06 10 $5.9000 $ 5,900 ZZCAD 05/31/06 5 $5.7000 $ 2,850 LWVAW 06/02/06 9 $6.0000 $ 5,400 LWVAW 06/02/06 1 $6.0000 $ 600 LWVAW 06/02/06 4 $6.0000 $ 2,400 CDQGD 06/02/06 10 $0.3000 $ 300 ZZCAD 06/02/06 5 $6.1000 $ 3,050 ZZCAD 06/02/06 5 $6.1000 $ 3,050 ZZCAD 06/02/06 5 $6.0000 $ 3,000 ZZCAD 06/02/06 5 $6.0000 $ 3,000 ZZCAD 06/02/06 10 $6.0000 $ 6,000 CDQAW 06/05/06 10 $3.8000 $ 3,800 CDQJV 06/09/06 10 $5.0000 $ 5,000 CDQAW 06/09/06 5 $3.3000 $ 1,650 CDQAW 06/09/06 5 $3.3000 $ 1,650 LWVAW 06/09/06 5 $5.4000 $ 2,700 LWVAW 06/16/06 5 $4.7000 $ 2,350 ZZCAW 06/16/06 5 $5.4000 $ 2,700 ZZCAW 06/16/06 1 $5.4000 $ 540 ZZCAW 06/16/06 2 $5.4000 $ 1,080 ZZCAD 06/21/06 5 $4.4000 $ 2,200 ZZCAD 06/23/06 5 $4.6000 $ 2,300 ZZCAW 06/23/06 5 $5.2000 $ 2,600 CDQHV 07/06/06 10 $4.9000 $ 4,900 ZZCAD 07/07/06 20 $5.2000 $ 0 ** CDQAW 07/07/06 20 $3.2000 $ 6,400 LWVAW 07/07/06 1 $5.5000 $ 550 LWVAW 07/07/06 4 $5.5000 $ 2,200 LWVAW 07/07/06 5 $5.5000 $ 2,750 ZZCAD 07/12/06 10 $5.0000 $ 0 ** CDQAW 07/12/06 10 $3.0000 $ 3,000 CDQJV 07/12/06 10 $5.1000 $ 5,100 ZZCAD 07/14/06 10 $4.0000 $ 0 CDQJC 07/14106 10 $2.1000 $ 2,100 CDQJW 07/19/06 10 $1.5000 $ 1,500 CDQHC 07/20/06 9 $2.2000 $ 1,980 CDQHC 07/20/06 6 $2.2000 $ 1,320 ZZCAW 07/21/06 2 $5.5000 $ 1,100 ZZCAW 07/21/06 5 $5.5000 $ 2,750 ZZCAW 07/27/06 10 $5.4000 $ 0 ** CDQAW 07/27/06 30 $2.7000 $ 8,100 CDQJV 07/27/06 10 $4.8000 $ 4,800 ZZCAW 07/27/06 5 $5.4000 $ 2,700 CDQJC 07/28/06 10 $2.8000 $ 2,800 CDQJW 07/28/06 10 $1.4500 $ 1,450 ZZCAD 08/03/06 10 $4.5000 $ 0 ** CDQIC 08/03/06 7 $2.1500 $ 1,505 ZZCAD 08/04/06 10 $4.1000 $ 0 CDQJW 08/04/06 10 61.0000 $ 1,000 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 5 of 17
CDQJW 08/04/06 10 $1.0000 $ 1,000 CDQIC 08/14/06 3 $2.0500 $ 615 CDQIC 08/14/06 10 $2.0500 $ 2,050 CDQIC 08/15/06 10 $2.3500 $ 2,350 CDQIC 08/15/06 10 $2.3500 $ 2,350 CDQHC 08/15/06 9 $2.0000 $ 1,800 CDQHC 08115/06 6 $2.0500 $ 1,230 CDQHV 08/15106 10 $4.5000 $ 4,500 CDQAW 08/16/06 5 $2.7000 $ 1,350 CDQIW 08/16/06 10 $1.1000 $ 1,100 CDQIW 08/16/06 10 $1.1000 $ 1,100 CDQJV 08/17/06 10 $6.3000 $ 6,300 CDQJV 08/17/06 10 $6.4000 $ 6,400 CDQIC 08/17/06 7 $3.7000 $ 2,590 CDQIC 08/17/06 3 $3.7000 $ 1,110 CDQJW 08/17/06 10 $2.1000 $ 2,100 CDQJW 08/17/06 10 $2.1500 $ 2,150 ZZCAW 08/18/06 10 $6.5000 $ 0 ** ZZCAD 08/18/06 10 $5.7000 $ 5,700 ZZCAD 08/18/06 5 $5.6000 $ 2,800 ZZCAD 08/18/06 5 $5.6000 $ 2,800 CDQIC 08/18/06 5 $3.8000 $ 1,900 CDQIC 08/18/06 5 $3.8000 $ 1,900 CDQIC 08/18/06 10 $3.8000 $ 3,800 CDQJW 08/18/06 10 $2.1000 $ 2,100 CDQIW 08/18/06 10 $1.6000 $ 1,600 ZZCAW 08/22/06 5 $7.2000 $ 0 ** ZZCAW 08/22/06 5 $7.3000 $ 0 ** ZZCAW 08/22/06 5 $7.3000 $ 3,650 CDQJW 08122/06 10 $2.8000 $ 2,800 CDQJD 08/22/06 10 $1.3500 $ 1,350 ZZCAW 08/23/06 5 $6.8000 $ 0 CDQDC 08/23/06 10 $6.1000 $ 6,100 CDQDD 08/23/06 5 $3.3000 $ 1,650 CDQDD 08/23/06 5 $3.3000 $ 1,650 CDQIW 08/24/06 10 $2.1000 $ 2,100 ZZCAD 08/25/06 5 $6.2000 $ 3,100 ZZCAD 08/25/06 5 $6.2000 $ 3,100 CDQJW 08/25/06 10 $3.1000 $ 3,100 CDQJD 08/25/06 10 $1.4500 $ 1,450 CDQDX 08/25/06 10 $2.6000 $ 2,600 CDQJC 08/28/06 5 $5.3000 $ 2,650 CDQJD 08/29/06 15 $1.6000 $ 2,400 CDQJW 08/29/06 10 $3.5000 $ 3,500 CDQIC 08/29/06 10 $5.5000 $ 5,500 ZZCAX 08/31/06 5 $5.6000 $ 0 ** ZZCAX 08/31/06 5 $5.6000 $ 0 ** ZZCAX 08/31/06 10 $5.7000 $ 0 CDQAW 08/31/06 5 $4.7000 $ 2,350 ZZCAW 08/31/06 1 $8.5000 $ 850 ZZCAW 08/31/06 2 $8.4000 $ 1,680 ZZCAW 08/31/06 5 $8.4000 $ 4,200 ZZCAW 08/31/06 2 $8.4000 $ 1,680 CDQJC 08/31/06 7 $6.1000 $ 4,270 CDQJC 08/31/06 3 $6.1000 $ 1,830 CDQIC 08/31/06 10 $5.5000 $ 5,500 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 6 of 17
CDQIC 08/31/06 10 $5.8000 $ 5,800 CDQIC 08/31/06 5 $5.8000 $ 2,900 CDQIW 09/01/06 10 $3.3000 $ 3,300 CDQIW 09/01/06 10 $3.3000 $ 3,300 CDQJC 09/01/06 5 $5.8000 $ 2,900 CDQDX 09/01/06 10 $3.0000 $ 3,000 CDQJD 09/08/06 5 $1.1000 $ 550 CDQIC 09/08/06 5 $4.5000 $ 2,250 CDQIC 09/08/06 10 $4.5000 $ 4,500 CDQDX 09111/06 10 $2.5000 $ 2,500 ZZCAD 09/14/06 5 $6.0000 $ 3,000 ZZCAD 09/18/06 10 $5.4000 $ 0** ZZCAX 09/21/06 5 $4.0000 $ 0** ZZCAW 09/22/06 5 $5.8000 $ 0 ** ZZCAW 09/22/06 5 $5.9000 $ 0 ZZCAX 09/22/06 5 $4.2000 $ 2,100 CDQDX 09/22/06 10 $1.8000 $ 1,800 ZZCAX 09/26/06 5 $4.1000 $ 0 CDQJC 09/26/06 2 $3.2000 $ 640 ZZCAX 10/04/06 10 $4.2000 $ 0 CDQJC 10/04/06 5 $3.4000 $ 1,700 CDQJC 10/04/06 7 $3.4000 $ 2,380 CDQKC 10/05/06 10 $3.8000 $ 3,800 CDQKC 10/05/06 10 $3.8000 $ 3,800 CDQJC 10109/06 3 $4.5000 $ 1,350 CDQJC 10/09/06 5 $4.5000 $ 2,250 CDQJC 10/09/06 2 $4.5000 $ 900 ZZCAD 10/10/06 10 $5.8000 $ 0 CDQKC 10/10/06 5 $4.9000 $ 2,450 CDQKC 10110/06 5 $4.9000 $ 2,450 CDQKC 10/10/06 10 $4.5000 $ 4,500 ZZCAX 10/13/06 5 $4.9000 $ 2,450 ZZCAD 10/13/06 5 $5.8000 $ 0 ** CDQDD 10/24/06 5 $3.3000 $ 1,650 CDQDX 10/30/06 5 $2.1500 $ 0 * ZZCAD 11/03/06 10 $5.1000 $ 5,100 ZZCAD 11/03/06 5 $5.0000 $ 2,500 ZZCAW 11/06/06 5 $6.1000 $ 3,050 ZZCAW 11/06/06 5 $6.1000 $ 3,050 CDQKC 11/06/06 10 $2.4000 $ 2,400 CDQLC 11/08/06 10 $3.2000 $ 3,200 CDQLC 11/09/06 10 $3.5000 $ 3,500 CDQKC 11/09/06 10 $3.0000 $ 3,000 CDQKC 11/09/06 5 $3.0000 $ 1,500 CDQKC 11/10/06 5 $3.1000 $ 1,550 CDQKC 11/10/06 10 $3.1000 $ 3,100 CDQLC 11/13/06 5 $4.7000 $ 2,350 CDQAC 11/16/06 10 $5.9000 $ 5,900 CDQDX 12/08/06 5 $2.2000 $0* CDQAV 12/08/06 10 $7.8000 $ 7,800 CDQDD 12/08/06 5 $3.6000 $ 1,800 CDQLC 12/08/06 10 $4.4000 $ 4,400 CDQLC 12/08/06 10 $4.4000 $ 4,400 CDQLC 12/08/06 5 $4.4000 $ 2,200 CDQAC 12/08/06 10 $5.6000 $ 5,600 TOTAL $ 305,620 $ 189,400 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 7 of 17
Excess of Cost of Purchases Over Proceeds from Saes = $ (116,220)
TOTAL LOSS = $ (116,220)
* Indicates sale of contracts purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 95 contracts purchased at earlier dates.) ** Indicates the covering purchase was made after the end of the class period. Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 8 of 17
Todd A Ste hens A/C #2 - Transactions in Nuvelo Options 1/5/06 throu gh 1218106
Option Date No. Contracts Price per Cost of No. Contracts Price per Proceeds of Type Purchased Contract Purchase Sold Contract Sale
CDQGV 05/31/06 10 $4.1000 $ 4,100 ZZCAD 05/31/06 9 $5.6000 $ 0 CDQAW 05/31/06 3 $3.2000 $ 960 ZZCAD 06/02/06 11 $6.0000 $ 0 * CDQGV 06/02/06 10 $4.8000 $ 4,800 CDQAW 06/16106 3 $2.5500 $ 765 CDQAW 06/16/06 7 $2.5500 $ 1,785 ZZCAD 06/21/06 5 $4.4000 $ 0 CDQJV 06/26/06 8 $4.0000 $ 3,200 ZZCAD 06/30/06 5 $4.7000 $ 2,350 CDQHV 07/05/06 5 $4.2000 $ 2,100 CDQJV 07/06/06 8 $5.3000 $ 4,240 CDQHV 07/06/06 5 $5.0000 $ 2,500 CDQHC 07/07/06 5 $2.8500 $ 1,425 CDQJV 07/07/06 2 $5.3000 $ 1,060 CDQJV 07/07/06 3 $5.3000 $ 1,590 CDQJV 07/07/06 5 $5.3000 $ 2,650 CDQIC 08/14/06 10 $2.0500 $ 2,050 ZZCAD 08/14/06 5 $4.3000 $ 2,150 CDQHC 08/15/06 5 $2.0000 $ 1,000 CDQJV 08/17/06 2 $6.5000 EXERCISED CDQIC 08/22/06 10 $4.5000 $ 4,500 CDQJC 08/25/06 8 $5.2000 $ 4,160 ZZCAD 08/31/06 5 $7.2000 $ 3,600 ZZCAD 08/31/06 5 $7.1000 $ 3,550 ZZCAX 08/31/06 5 $5.6000 $ 0 * ZZCAX 08131/06 5 $5.5000 $ 0 * CDQJV 08/31/06 2 $8.3000 $ 1,660 ZZCAX 10/04/06 2 $4.1000 $ 0 * CDQJC 10/04/06 8 $3.4000 $ 2,720 CDQJV 10/09/06 3 $7.1000 $ 2,130 CDQKC 10/10/06 6 $4.9000 $ 2,940 CDQKC 10/20/06 1 $4.2000 $ 420 CDQKC 10/20/06 7 $4.2000 $ 2,940 CDQJV 10/20/06 5 $6.4000 $ 3,200 CDQLC 11/09/06 6 $3.6000 $ 2,160 CDQKC 11/09/06 6 $3.1000 $ 1,860 CDQKC 11/09/06 1 $3.1000 $ 310 CDQKC 11/09/06 7 $3.1000 $ 2,170 CDQLC 12/08/06 6 $4.5000 $ 2,700 TOTAL $ 40,495 $ 39,250
Excess of Cost of Purchases Over Proceeds from Sales = $ (1,245)
TOTAL LOSS = $ (1,245)
* Indicates sale of contracts purchased prior to class period, on a first-in, firstout basis. (At the start of the class period, the client owned 37 contracts purchased at earlier dates.) Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 9 of 17
Todd Stephens A/C #3 - Transactions in Nuvelo Options 115106 through 1218106
Option Date No. Contracts Price per cost of No. Contracts Price per Proceeds of Type Purchased Contract Purchase Sold Contract Sale
CDQGW 02/02/06 1 $2.3304 $ 233 CDQGW 02/02/06 9 $2.3304 $ 2,097 CDQGW 02108/06 11 $2.2333 $ 2,457 CDQGW 02/08/06 3 $2.2141 $ 664 CDQGW 02/08106 6 $2.2333 $ 1,340 LWVAW 02/14/06 5 $5.8815 $ 2,941 LWVAW 02/14/06 5 $5.8815 $ 2,941 LWVAW 02114/06 2 $5.8815 $ 1,176 CDQGW 02/17/06 9 $3.0203 $ 2,718 CDQGD 02/17/06 10 $1.8333 $ 1,833 CDQGD 02/17/06 7 $1.8333 $ 1,283 CDQGD 03/01/06 10 $1.5195 $ 1,520 CDQGD 03/01/06 7 $1.5725 $ 1,101 CDQJD 03/01/06 8 $2.1804 $ 1,744 CDQJD 03/01/06 2 $2.1804 $ 436 CDQJD 03/01/06 7 $2.2274 $ 1,559 CDQGW 03/06106 1 $2.4195 $ 242 CDQGW 03106/06 11 $2.4189 $ 2,661 CDQGW 03/06/06 3 $2.4195 $ 726 CDQGW 03/06/06 6 $2.4195 $ 1,452 CDQJW 03/06/06 10 $3.0804 $ 3,080 ZZCAW 03/10/06 4 $3.8699 $ 0 * ZZCAW 03/14/06 6 $4.3757 $ 0 * CDQEC 03/28/06 2 $2.0625 $ 413 CDQEC 03/28/06 5 $2.0765 $ 1,038 CDQJD 04/19/06 7 $1.8725 $ 1,311 CDQJD 04/27/06 8 $1.4125 $ 1,130 CDQJD 04/27/06 2 $1.4475 $ 290 CDQFC 04/27/06 5 $2.4765 $ 1,238 ZZCAW 04/27/06 7 $3.4774 $0. CDQEC 04/27/06 2 $1.9274 $ 385 CDQEC 04/27/06 5 $1.9274 $ 964 CDQGV 05/01/06 5 64.4242 $ 2,212 CDQGV 05/01/06 1 64.4242 $ 442 ZZCAW 05/01/06 6 $3.3757 $0. ZZCAW 05/02/06 3 $3.1358 $ 941 LWVAW 05/02/06 3 $4.4640 $ 1,339 CDQGV 05/04/06 2 $4,0475 $ 810 ZZCAW 05/04/06 2 $2.9524 $ 0 * ZZCAW 05/04/06 3 $2.9641 $ 0 * CDQJW 05/05/06 10 $2.6195 $ 2,620 ZZCAW 05/05/06 7 $3.7804 $ 0 * CDQFC 05/05/06 5 $2.0534 $ 1,027 ZZCAW 05/05/06 3 63.7804 $ 1,134 CDQGV 05/08/06 2 65.0475 $ 1,010 CDQAW 05/19/06 4 $2.7765 $ 1,111 CDQAW 05/19/06 10 $2.7195 $ 2,720 CDQAW 05/19/06 1 $2.7765 $ 278 CDQAW 05/19/06 10 $2.8695 $ 2,870 LWVAW 05/19/06 2 $4.2815 $ 856 LWVAW 05/19/06 10 $4.2815 $ 4,282 CDQAW 05/23/06 4 $2.5699 $ 1,028 LWVAW 06/02/06 2 $5.9475 $ 1,190 CDQAW 06/02/06 14 $4.0175 $ 5,625 ZZCAD 06/02/06 1 $5.9873 $ 0 * ZZCAD 06/02/06 9 $5.9795 $ 0 * ZZCAD 06/02/06 10 $5.8803 $0* CDQJV 06/09/06 1 $4.6125 $ 461 CDQJV 06/09/06 4 $4.6203 $ 1,848 CDQJV 06/09/06 5 $4.6203 $ 2,310 ZZCAD 06109/06 5 $5.0733 $0* LWVAW 06/16/06 5 $4.7265 $ 2,363 CDQGV 06/21/06 5 $2.9734 $ 1,487 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 10 of 17
CDQHV 07/05/06 5 84.2265 $ 2,113 CDQGV 07/05/06 2 $4.1734 $ 835 CDQGV 07/05/06 1 $4.1734 $ 417 CDQGV 07/05/06 2 $4.1734 $ $35 ZZCAD 07/06/06 5 $4.9733 $ 0 * CDQHV 07/06/06 5 $4.8733 $ 2,437 CDQJV 07/06/06 1 $5.1733 $ 517 CDQJV 07/06/06 4 55.17333 $ 2,069 LWVAW 07/07/06 5 $5.4195 $ 2,710 LWVAW 07/07/06 3 $5.4195 $ 1,626 LWVAW 07/07/06 2 $5.4195 $ 1,084 LWVAW 07/07/06 10 $5.5195 $ 5,520 ZZCAD 07/14/06 10 $3.9804 $ 0 * CDQJW 07/14/06 5 $1.0735 $ 537 CDQJW 08/08/06 5 $1.0265 $ 513 CDQIC 08/08/06 5 $1.8695 $ 935 CDQIC 08/08/06 5 $1.8695 $ 935 CDQIC 08/14/06 5 $2.1765 $ 1,088 ZZCAD 08/16/06 5 $4.6804 $ 0 ZZCAD 08/16/06 5 $4.6804 $ 2,340 CDQJV 08/17/06 10 $6.5195 $ 6,520 CDQIC 08/18/06 10 $3.7195 $ 3,720 CDQIC 08/18/06 5 $3.8734 $ 1,937 CDQJC 08/22/06 7 $4.7225 $ 3,306 CDQIC 08/22/06 5 $4.3804 $ 2,190 CDQ[C 08/22/08 5 $4.3804 $ 2,190 CDQIC 08/23/06 5 $4.2195 $ 2,110 CDQIC 08/23/06 5 $4.2195 $ 2,110 CDQJC 08/25/06 1 $5.3825 $ 538 CDQJC 08/25/06 2 $5.2475 $ 1,050 CDQIC 09/05/06 10 $5.8000 $ 5,800 CDQJC 09/08/06 10 $4.7000 $ 4,700 CDQIC 09/08/06 5 $4.5000 $ 2,250 CDQIC 09/08/06 5 $4.5000 $ 2,250 CDQJC 09/21/06 7 $3.0787 $ 2,155 CDQJC 09/21/06 1 $3.0787 $ 308 CDQJC 09/26/06 2 $3.1524 $ 630 ZZCAX 10/09/06 10 $4.4000 $0* ZZCAX 10/09/06 5 $4.7000 $ 2,350 ZZCAD 11/03/06 5 $4.9000 $ 2,450 ZZCAX 11/06/06 5 $4.3000 $ 2,150 CDQLC 11/09/06 10 $3.6000 $ 3,600 CDQLC 11/13/06 5 $4.7000 $ 2,350 CDQLC 12/08/06 10 $4.5000 $ 4,500 CDQLC 12/08/06 5 $4.5000 $ 2,250 TOTAL $ 95,771 $ 75,085
Excess of Cost of Purchases Over Proceeds from Sales = $ (20,686)
TOTAL LOSS = $ (20,686)
* Indicates sale of contracts purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 90 contracts purchased at earlier dates.) Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 11 of 17
Todd Stephens A/C #4 - Transactions in Nuvelo Options 1/5106 through 1218106
Option Date No. Contracts Price per Cost of No. Contracts Price per Proceeds of Type Purchased Contract Purchase Sold Contract Sale
CDQGW 02/02/06 10 $2.3804 $0. CDQGW 02/07/06 10 $2.0851 $0* CDQGW 02/07/06 10 $2.0851 $ 2,085 CDQGW 02/07/06 10 $2.0851 $ 2,085 CDQGW 02/09/06 10 $2.5874 $ 2,587 CDQGW 02/09/06 10 $2.5851 $ 2,585 CDQGW 02/09/06 9 $2.5851 $ 2,327 CDQGW 02109/06 1 $2.5851 $ 259 CDQGW 02/09/06 10 $2.5851 $ 2,585 CDQGD 02/17/06 2 $1.8374 $ 0 * CDQGD 02/17/06 8 $1.8287 $0 CDQGD 02/17/06 10 $1.8357 $ 0 CDQGW 02/17/06 .10 $3.0195 $ 3,020 CDQGW 02/17/06 10 $3.1125 $ 3,113 CDQGW 02/17/06 10 $3.1125 $ 3,113 CDQGW 02/17/06 10 $3.1195 $ 3,120 CDQGD 02/17/06 1 $1.8357 $ 184 CDQGD 02/17/06 4 $1.8357 $ 734 CDQGD 02/17/06 10 $1.8357 $ 1,836 CDQGD 02/17/06 15 $1.8357 $ 2,754 CDQGD 02/28/06 1 $1.1625 $ 116 CDQGD 02/28/06 4 $1.1625 $ 465 CDQGD 02/28/06 10 $1.1695 $ 1,170 CDQJD 03/01/06 5 $2.1734 $ 0 CDQJD 03/01106 10 $2.2304 $ 0' CDQJD 03/01106 10 $2.2804 $0. CDQJD 03/06/06 10 $2.0304 $ 0 * CDQGW 03!06106 9 $2.4203 $ 2,178 ZZCAW 03/10/06 10 $3.8804 $ 0 ZZCAW 03/14/06 10 $4.3804 $ 0 CDQJD 03/14/06 5 $1.9734 $ 0 * CDQGD 03/14/06 15 $1.3000 $ 1,950 CDQGW 03/14/06 1 $2.1625 $ 216 CDQGW 03/14/06 10 $2.1695 $ 2,170 TOTAL $ 20,629 $ 20,020
Excess of Cost of Purchases Over Proceeds from Sales = $ (609)
TOTAL LOSS = $ (609)
* Indicates sale of contracts purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 100 contracts purchased at earlier dates.) Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 12 of 17
Todd & Amy Stephens AIC #1 - Transactions in Nuvelo Stock 115/06 throw h 1218106
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
10/09/06 500 $12.5000 $ 6,250 10/09/06 1,000 $12.5000 $ 12,500 11/03/06 500 $17.3201 $0* 11/06/06 500 $17.2400 $0* TOTAL $ 18,750 $ ..
Excess of Cost of Purchases Over Proceeds from Sales = $ (18,750)
Less Settle-Out Value' of 1,500 shares held at End of Class Period = $ 5,402
TOTAL LOSS = $ (13,348)
* Indicates sale of shares purchased prior to class period, on a firstin, first-out basis. (At the start of the class period, the client owned 5,000 shares purchased at earlier dates.) Settle-out value (average closing price 12/11/06 - 03108107) = $3.6015 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 13 of 17
Todd Ste phens A/C #1 - Transactions in Nuvelo Stock 115106 throu gh 1218106
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
04/20/06 700 $17.4300 $ 12,201 04/20/06 200 $17.5000 $ 3,500 04/20/06 100 $17.5200 $ 1,752 04/21/06 500 $17.2800 $ 8,640 04/27/06 500 $16.4095 $o* 04/28/06 1,000 $16.4595 $0* 05/04/06 500 $15.9339 $0* 05/12/06 300 $15.5686 $o* 05/12/06 500 515.5795 $ 0 * 05/17/06 200 $15.3508 $ 0 * 05/22/06 85 $14.6220 $ 0 * 05122/06 100 $14.6396 $ 0 * 05/22/06 415 $14.8755 $ 0 * 05/23/06 400 $14.9646 $0. 05/31/06 500 $12.5000 $ 6,280 05/31/06 1,000 $12.5000 $ 12,500 06/02/06 1,000 $12.5000 $ 12,530 06/02/06 500 $12.5000 $ 6,280 06/07/06 500 $16.2084 $ 8,104 06/07/06 1,000 $12.5000 $ 12,530 06/09/06 1,000 $12.5000 $ 12,530 06/19/06 170 $15.3387 $0* 06/23/06 330 $15.5816 $0* 07/06/06 500 $17.4879 $ 8,744 07/14/06 400 $15.8087 $0* 07/27/06 100 $17.0899 $ 1,709 08/16/06 100 517.7775 $ 1,778 08/16/06 200 $17.7100 $ 3,542 08/31/06 1,000 $12.5000 $ 12,530 09/01/06 1,000 $12.5000 $ 12,530 09/14/06 300 $19.4561 $ 0 * 09/19/06 100 $18.3094 $ 0 09/19/06 100 $18.2195 $ 0 09/25/06 500 $17.7295 $ 0 09/25/06 500 $12.5000 $ 6,280 10/04/06 1,000 $12.5000 $ 12,530 10/09/06 1,000 $12.5000 $ 12,530 10/10/06 500 $12.5000 $ 6,280 10/17/06 400 $18.9226 $ 7,569 10/18/06 100 $19.5516 $ 1,955 11/03/06 15 $17.3393 $ 0 " 11/03/06 485 $17.3189 $0* 11103106 1,000 $17.5596 $0* 11/06/06 1,000 $17.3296 $ 0 * TOTAL $ 184,824 $ -
Excess of Cost of Purchases Over Proceeds from Sales = $ (184,824)
Less Settle -Out Value' of 13,400 shares held at End of Class Period = $ 48,260
TOTAL LOSS = $ ( 136,564)
Indicates sale of shares purchased prior to class period, on a first-in, first-out basis. (At the start of the class period, the client owned 21,500 shares purchased at earlier dates.) " Settle-out value (average closing price 12/11/06 - 03108107) = $3.6015 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 14 of 17
Todd Stephens A/C #2 - Transactions in Nuvelo Stock 115106 through 1218106
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
01/27/06 100 $15.2700 $ 1,527 01/27/06 200 $15.2875 $ 3,058 01/27/06 200 $15.2875 $ 3,058 01/27/06 1,000 $15.2699 $ 15,270 01/30/06 100 $16.2000 $ 1,620 01/30/06 100 $16.2700 $ 1,627 01/30/06 300 $16.2000 $ 4,860 01/30/06 500 $15.9140 $ 7,957 01/31/06 500 $17.1640 $ 8,582 02/02/06 700 $16.7790 $ 11,745 02/08/06 300 $16.8932 $ 5,068 05/19/06 100 $14.6963 $ 1,470 05/19106 200 $14.6963 $ 2,939 06/02/06 300 $17.3132 $ 5,194 TOTAL $ 69,565 $ 4,409
Excess of Cost of Purchases Over Proceeds from Sales = $ (65,156)
Less Settle-Out Value* of 4,000 shares held at End of Class Period = $ 14,406
TOTAL LOSS = $ (50,750)
* Settle-out value (average closing price 12/11/06 - 03108107) = $3.6015 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 15 of 17
Todd Stephens A/C #3 - Transactions in NuveloStock 115106 through 1218106
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
01/26/06 475 $15.4390 $ 7,334 01/31/06 475 $17.2300 $ 8,184 02/01/06 50 $16.8300 $ 842 02/09/06 378 $17.4690 $ 6,603 02/09/06 222 $17A000 $ 3,863 02/10/06 900 $17.0700 $ 15,363 TOTAL $ 42,188 $ -
Excess of Cost of Purchases Over Proceeds from Sales = $ (42,188)
Less Settle-Out Value* of 2,500 shares held at End of Class Period= $ 9,004
TOTAL LOSS = $ (33,185)
* Settle-out value (average closing price 12/11/06 - 03108107) = $3.6015 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 16 of 17
Todd Stephens A/C #4. Transactions in Nuvelo Stock 115106 through 1218106
Date No. Shares Price per Cost of No. Shares Price per Proceeds of Purchased Share Purchase Sold Share Sale
01/26/06 7 $15.4400 $ 108 01/26/06 20 $15.4300 $ 309 01/26/06 22 $15.4400 $ 340 01/26/06 56 $15.4900 $ 867 01/26/06 67 $15.5345 $ 1,041 01/26/06 83 $15.5043 $ 1,287 01/26/06 100 $15.3500 $ 1,535 01/26/06 100 $15.4300 $ 1,543 01/26/06 100 $15.4400 $ 1,544 01/26/06 100 $15.4400 $ 1,544 01/26/06 100 $15.4700 $ 1,547 01/26/06 100 $15.5000 $ 1,550 01/26/06 200 $15.3600 $ 3,072 01/26/06 317 $15.4300 $ 4,891 01/26/06 344 $15.3500 $ 5,280 01/26/06 500 $15.4600 $ 7,730 01/26/06 600 $15.5100 $ 9,306 01/26/06 684 $15.4400 $ 10,561 01/30/06 500 $15.8640 $ 7,932 02/02/06 700 $16.7290 $ 11,710 02/06/06 74 $16.6000 $ 1,228 02/06/06 100 $16.2200 $ 1,622 02/06/06 100 $16.6000 $ 1,660 02/06/06 100 $16.6000 $ 1,660 02/06/06 100 $16.6000 $ 1,660 02/06/06 100 $16.6000 $ 1,660 02/06/06 100 $16.6500 $ 1,665 02/06/06 200 $16.6000 $ 3,320 02/06/06 500 $16.3040 $ 8,152 02/06/06 526 $16.6000 $ 8,732 02/06/06 900 $16.1500 $ 14,535 02/06/06 1,000 $16.5570 $ 16,557 02/07/06 100 $16.1500 $ 1,615 02/07/06 100 $16.3500 $ 1,635 02/07/06 100 $16.3500 $ 1,635 02/07/06 100 $16.3500 $ 1,635 02/07/06 100 $16.3500 $ 1,635 02/07/06 100 $16.3500 $ 1,635 02/07/06 100 $16.3500 $ 1,635 02/07/06 100 $16.4200 $ 1,642 02/07/06 300 $16.3500 $ 4,905 02/07/06 400 $16.1675 $ 6,467 02/08/06 1,000 $16.9569 $ 16,957 02/15/06 100 $18.0600 $ 1,806 02/15/06 100 $18.0600 $ 1,806 02/15/06 800 $18.0688 $ 14,455 TOTAL $ 195,611 $ -
Excess of Cost of Purchases Over Proceeds from Sales = $ (195,611)
Less Settle-Out Value* of 12,000 shares held at End of Class Period = $ 43,218
TOTAL LOSS = $ (152,393)
`Settle-out value.(average closing price 12/11/06 - 03108107) = $3.6015 Case 3:07-cv-04056-VRW Document 31-4 Filed 11/09/2007 Page 17 of 17
Todd Stephens NC #5 - Transactions in Nuvelo Stock 1/5/06 through 1218106
Date No. Price per Cost of No. Price per Proceeds of Shares Share Purchase Shares Share Sale
05/31/06 100 $16.3000 $ 1,640 06/02/06 175 $17.2464 $ 3,028 06/02/06 125 $17.2000 $ 2,160 06/08/06 200 $16.3817 $ 3,286 10/04/06 200 $12.5000 $ 2,530 TOTAL $ 12,644 $
Excess of Cost of Purchases Over Proceeds from Sales = $ (12,644)
Less Settle-Out Value* of 800 shares held at End of Class Period = $ 2,881
TOTAL LOSS = $ (9,763)
* Settle-out value (average closing price 12/11/06 - 03/08/07) = $3.6015