A class action lawsuit was filed against Anavex Life Sciences (NASDAQ:AVXL) on March 13, 2024. The plaintiffs (shareholders) alleged that they bought AVXL stock at artificially inflated prices between February 1, 2022 and January 1, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought AVXL stock during that period can learn about joining the lawsuit here: https://zlk.com/pslra-1/anavex-life-sciences-lawsuit-submission-form?wire=16
Anavex is a biopharmaceutical company focused on the development of targeted treatments for ailments involving the central nervous system (CNS). The company’s lead candidate, Anavex 2-73 (blarcamesine) is focused on various ailments affecting the CNS.
The plaintiffs maintain that the company and its CEO deceived investors by repeatedly lying and withholding vital information about Anavex’s business prospects during the Class Period. Importantly, the defendants are accused of omitting truthful information about the research methods and analysis employed in studies assessing the feasibility of its primary product’s use in the treatment of pediatric Rett Syndrome.
Interestingly, during the Class Period, the CEO often reiterated the progress on the Phase 2/3 EXCELLENCE Clinical Study in treating Pediatric Rett Syndrome. Furthermore, the CEO stated that Anavex will continue to use the endpoint “because it’s just described, it is just the preference of the FDA.” The CEO also stated that the enrollment for the study exceeded the original target.
However, the truth was revealed on January 2, 2024, when the company issued a press release stating that one key co-primary endpoint showed improvement while the other did not meet the desired results. The company blamed the “large placebo effect which may have masked the compound’s therapeutic effect” for the failure.
As per the class action lawsuit, Anavex caused AVXL stock to trade at artificially inflated prices by knowingly and recklessly omitting truthful information about its business prospects.
Notably, on January 2, 2024, AVXL stock plunged over 35%, causing massive damage to shareholders’ returns.
