BioXcel Therapeutics, a clinical-stage biopharmaceutical company, is facing a class-action lawsuit over alleged misrepresentations and fabrication. The lawsuit, filed on behalf of investors who purchased or acquired BioXcel Therapeutics securities between December 15, 2021, and June 28, 2023, claims that the company made false statements and failed to disclose material adverse facts about its business, operations, and prospects.
The class-action lawsuit stems from an announcement made by BioXcel Therapeutics on December 15, 2021, regarding its program to evaluate a potential treatment for acute agitation associated with Alzheimer’s disease. The program involved two studies, TRANQUILITY II and TRANQUILITY III, which were randomized, double-blind, placebo-controlled trials designed to assess the safety and efficacy of the treatment.
However, on June 29, 2023, BioXcel Therapeutics disclosed that its principal investigator for the Phase 3 TRANQUILITY II trial had failed to adhere to the approved informed consent form for some subjects and had not maintained adequate case histories for certain patients. Additionally, the company revealed that the principal investigator may have fabricated email correspondence related to the submission of a report of a serious adverse event (SAE) and its confirmation by a pharmacovigilance safety vendor. This fabricated correspondence was provided to the Food and Drug Administration (FDA) during an inspection in December 2022. As a result of these findings, BioXcel Therapeutics announced that it was investigating protocol adherence and data integrity and would be hiring an independent third party to audit the trial site’s collected data.
This news had a significant impact on BioXcel Therapeutics’ stock price, which fell by 63.8% or $11.28 per share to close at $6.39 per share on June 29, 2023, on unusually high trading volume.
The class-action lawsuit alleges that throughout the Class Period, BioXcel Therapeutics and its executives made false and misleading statements, as well as failed to disclose important information to investors. It claims that the company lacked proper internal controls, leading to protocol adherence and data integrity issues. The principal investigator’s failure to adhere to the approved informed consent form and maintain adequate case histories for certain patients was not disclosed to investors. Additionally, the lawsuit alleges that the principal investigator fabricated email correspondence, which adversely affected the company’s ability to secure regulatory approval for its treatment.
Investors who purchased or acquired BioXcel Therapeutics securities during the Class Period have until September 5, 2023, to request appointment as lead plaintiff in this class-action lawsuit. Those who wish to learn more about the lawsuit or their rights and interests can contact Glancy Prongay & Murray LLP or visit their website.
As the legal battle ensues, it remains to be seen how BioXcel Therapeutics will address the allegations and potential consequences. The outcome of the class-action lawsuit will likely have a significant impact on the company’s future development plans and regulatory approval prospects. Investors will be closely monitoring the developments surrounding this case as they assess the potential impact on their investments.
