Athenex is well on the way to filing its new drug application for the treatment of breast cancer with the US Food and Drug Administration. However, there may be a legal challenge at the same time.
First, the good news.
Athenex Inc. representatives recently announced that company employees had attended a constructive meeting with FDA officials to discuss the clinical portion of the company’s new drug application for oral paclitaxel and encequidar for the treatment of metastatic breast cancer. Athenex officials said they are on track to file the application according to FDA guidelines and will provide another update as soon as the FDA’s official response to the filing becomes available.
The company is building a 409,000-square-foot facility in Dunkirk to open by the end of the year. Part of it is dedicated to the production of large quantities of prescriptions for healthcare facilities for use in the office.
While the company has been working to get its breast cancer treatment approved by the FDA, the company and its executives are also facing a class action lawsuit alleging Athenex officials failed to notify investors that the Athenex’s filing with the FDA A safety risk for patients and that the company used an inadequate Phase 3 study that may not meet FDA guidelines.
The lawsuit references several press releases and public statements by company officials dated Fall 2019 through February 26, 2021, in which company officials announced the development of oral paclitaxel and its likely FDA approval.
Before the financial markets opened on March 1, 2021, Athenex announced that the FDA has issued a full response letter for the company’s new drug application for oral paclitaxel plus encequidar for the treatment of metastatic breast cancer. In the letter, the FDA cited patient safety risks and uncertainties about the results of the primary endpoint, objective response rate, which may have resulted in unmeasured bias and unmeasured impact on the blinded independent central review. The FDA recommended this to others “Athenex is conducting a new adequate and well-performed clinical trial in a patient population with metastatic breast cancer representative of the US population.” The FDA also noted that additional risk reduction strategies to improve toxicity would be required for this cancer treatment to be approved.
The letter caused Athenex stock prices to drop 55%, or hundreds of millions of dollars in lost market capitalization, in one day, the lawsuit said. Several law firms are now trying to enlist investors in a class action lawsuit against investors who bought Athenex shares and lost money between August 7, 2019 and February 26, 2021.
The lawsuit was filed in the US District Court for the Western Borough of New York at 2 Niagara Square, Buffalo, NY 14202. The case is headed Gupta v Athenex, Inc., et al., No. 1: 21-cv-00337 (WDNY) and has not yet been assigned to a specific judge.
“Throughout the class, the defendants made material false and misleading statements regarding the company’s business.” the lawsuit states.
The lawsuit alleges that the data contained in the oral paclitaxel plus encequidar NDA presented a safety risk to patients and that the uncertainty about the results of the primary endpoint of objective response rate at week 19 identified by a blinded independent centralized review match and a Reread may have existed, have unmeasured bias and influence on blinded independent review. Lawyers also claim that Athenex’s Phase 3 study, which was used to submit the NDA, was inadequate and not well conducted in a metastatic breast cancer patient population representative of the US population, so the FDA issued a would recommend new such clinical trial.
“As a result, it was foreseeable that the FDA would not approve the Athenex NDA in its current form. As a result, Athenex’s public statements were materially false and misleading at all relevant times. “ the lawsuit states.
The lawsuit seeks a lawsuit to determine whether Athenex has violated the Federal Stock Exchange Act, omitted or misrepresented material facts, whether statements by Athenex officials omitted facts in their statements, whether company officials knew or recklessly ignored that their statements could be false or misleading as to whether the company’s stock prices have been artificially inflated and how much damage has been suffered by investors, and a reasonable measure of the damage.
“Plaintiff and the class have suffered harm by paying artificially inflated prices for the company’s shares based on the integrity of the market. Plaintiff and the class would not have bought the company’s shares at the price paid, or not at all, had they known that market prices were artificially and falsely inflated by Defendant’s misleading statements. “ the lawsuit states.
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