Acer Therapeutics Inc.
- Company Name
- Acer Therapeutics Inc.
- Stock Symbol
- Class Period
- September 25, 2017 to June 24, 2019
- Motion Deadline
- August 30, 2019
- Southern District of New York
The complaint charges Acer and certain of its officers with violations of the Securities Exchange Act of 1934. Acer is a pharmaceutical company focused on the acquisition, development, and commercialization of therapies for serious rare and life-threatening diseases. Acer’s pipeline includes, inter alia, EDSIVO (celiprolol) for the treatment of vascular Ehlers-Danlos syndrome (“vEDS”) a rare disease known to cause abnormal fragility in blood vessels, in patients with a confirmed type III collagen mutation.
In 2004, the French research hospital, Assistance Publique-Hôpitaux de Paris (“AP-HP”), published data on vEDS patients. Based on AP-HP’s research, investigators began assessing the preventive effect of celiprolol for major cardiovascular events in patients suffering from vEDS through a randomized open trial known as the Ong Trial. The Ong Trial’s results were published on October 30, 2010. On December 13, 2016, Acer’s predecessor company announced it had had obtained exclusive rights to clinical data from AP-HP for the use of celiprolol in treating vEDS and would use this data to support its New Drug Application (“NDA”) for the drug. On December 26, 2018, Acer announced the FDA had accepted the Company’s NDA for EDSIVO for the treatment of vEDS and had granted priority review of the NDA, assigning a Prescription Drug User Fee Act target action date of June 25, 2019.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or omitted adverse information regarding the Company’s business and prospects. Specifically, defendants failed to disclose that Acer lacked sufficient data to support the filing of the NDA for EDSIVO for the treatment of vEDS, that the Ong Trial was an inadequate and ill-controlled clinical study by FDA standards that was of insufficient size to support EDSIVO’s NDA, and that, consequently, the FDA would likely reject the NDA for EDSIVO. As a result of this information being withheld from the market, Acer securities traded at artificially inflated prices during the Class Period, with the Company’s stock price reaching a high of more than $32 per share.
Then on June 25, 2019, Acer announced it had received a Complete Response Letter (“CRL”) from the FDA regarding EDSIVO for the treatment of vEDS patients. Acer advised investors that “[t]he CRL states that it will be necessary to conduct an adequate and well-controlled trial to determine whether celiprolol reduces the risk of clinical events in patients with vEDS,” and that “Acer plans to request a meeting to discuss the FDA’s response.” The same day, news sources reported that the small group size of the Ong Trial had raised questions among experts about the adequacy of EDSIVO’s trial results. Following this news, Acer’s stock price fell $15.16 per share, or more than 78%, to close at $4.12 per share on June 25, 2019.