Class Action Lawsuit Against Cerevel Therapeutics Holdings, Inc.

A class action lawsuit was filed against Cerevel Therapeutics Holdings (now acquired by AbbVie (ABBV)) by Levi & Korsinsky on April 3, 2025. The plaintiffs (shareholders) alleged that they sold Cerevel stock at artificially deflated prices between October 11, 2023 and August 1, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Cerevel Therapeutics stock during that period can click here to learn about joining the lawsuit.

Cerevel operated as a clinical-stage biopharmaceutical company, prior to its acquisition by AbbVie on August 1, 2024. The company’s drug pipeline focused on developing novel treatments for schizophrenia, Alzheimer’s disease psychosis, epilepsy, panic disorder, and Parkinson’s disease. The company was founded in 2018 through financial contributions from Bain Capital Advisors, Inc. and the transfer of “pre-commercial neuroscience assets” from Pfizer, Inc. (PFE). Both Bain and Pfizer were controlling shareholders of Cerevel during the Class Period.

The timing and pricing of Cerevel’s secondary offering in October 2023, and its subsequent acquisition by AbbVie, are at the heart of the current complaint.

Cerevel Therapeutics’ Misleading Claims

According to the lawsuit, Cerevel Therapeutics (the Defendant) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about its secondary offering conducted in October 2023, and its acquisition by AbbVie, from SEC filings and related material.

For instance, during the Class Period, the company filed a Preliminary Prospectus Supplement with the SEC discussing the potential secondary offering. In the same filing, Cerevel noted that it intends to use the net proceeds from the offering, along with its existing cash and cash equivalents, to support its ongoing and planned clinical trials and other research and development activities. Plus, the proceeds would be used for working capital and other general corporate purposes, including extending the company’s cash runway into 2026.

Similar statements were made by Cerevel in a Prospectus Supplement filed with the SEC on October 12, 2023. The company priced the offering at $22.81 per share. Notably, Bain acquired additional shares during the secondary offering at artificially depressed prices, having insider knowledge of AbbVie’s interest in acquiring Cerevel. The company made no mention of the pharmaceutical giant’s acquisition interest in the Prospectus.  

Additionally, during a November 1, 2023, earnings call, Cerevel’s CEO mentioned that the company had been in discussions about the capital raise with several outside investors over the preceding months. Hence, Cerevel decided to take up the secondary offering at the time and also to refurbish its cash position beyond 2026.

However, subsequent events (discussed below) revealed that Cerevel and Bain had failed to notify investors of AbbVie’s intent to acquire the company well in advance of the secondary offering.

Plaintiffs’ Arguments

The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the business during the Class Period. Importantly, the defendants are accused of misleading investors about the pricing of the secondary offering and of artificially deflating Cerevel’s stock price until the merger was announced.

The information became clear on December 6, 2023, when AbbVie announced the signing of a definitive agreement to acquire Cerevel Therapeutics for $45 per share in cash. The offer price was significantly higher than Cerevel’s secondary offering price. By keeping the talks non-public, Cerevel had artificially depressed the company’s stock price for a prolonged period.

Surprisingly, Cerevel tried to hide all along that it was aware of AbbVie’s interest in acquiring the company. For instance, in a Proxy Statement filed with the SEC on January 18, 2024, the company again mentioned that during prior discussions in September 2023, “AbbVie did not indicate that an offer to acquire Cerevel would be forthcoming.”

To conclude, Cerevel allegedly misled investors in selling the company’s stock at artificially depressed prices by knowingly withholding material information about AbbVie’s premium-priced acquisition offer, causing massive damage to shareholder returns. What’s worse, Bain Capital made a windfall gain of more than $120 million by selling the shares it acquired at the artificially depressed offering price.