AstraZeneca

On November 23, 2020, AstraZeneca announced the results of an interim analysis of its ongoing clinical trials for AZD1222. Though the Company claimed that the drug candidate was highly effective in preventing COVID-19, the primary endpoint of the trials, AstraZeneca disclosed that the interim analysis involved two smaller scale trials in different locales that used two different dosing regimens. One clinical trial provided patients a half dose of AZD1222 followed by a full dose, while the other trial provided two full doses. AstraZeneca contradictorily claimed that the half dosing regimen was substantially more effective at preventing COVID-19 at 90% efficacy than the full dosing regimen, which had achieved just 62% efficacy. The Company noted the combined “average efficacy of 70%” among two trials.

The unexplained discrepancies, omissions and the need for multiple trials in separate locales raised red flags for investors and distinguished AstraZeneca’s trial procedures from those of other biopharmaceutical companies, such as Pfizer and Moderna. 

On this news, the price of AstraZeneca’s American Depositary Shares (“ADSs”) fell $2.10, or 5%, over three consecutive trading sessions to close at $52.60 per ADS on November 25, 2020.

The complaint filed alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) initial clinical trials for AZD1222 had suffered from a critical manufacturing error, resulting in a substantial number of trial participants receiving half the designed dosage; (2) clinical trials for AZD1222 consisted of a patchwork of disparate patient subgroups, each with subtly different treatments, undermining the validity and import of the conclusions that could be drawn from the clinical data across these disparate patient populations; (3) certain clinical trial participants for AZD1222 had not received a second dose at the designated time points, but rather received the second dose up to several weeks after the dose had been scheduled to be delivered according to the original trial design; (4) AstraZeneca had failed to include a substantial number of patients over 55 years of age in its clinical trials for AZD1222, despite this patient population being particularly vulnerable to the effects of COVID-19 and thus a high priority target market for the drug; (5) AstraZeneca’s clinical trials for AZD1222 had been hamstrung by widespread flaws in design, errors in execution, and a failure to properly coordinate and communicate with regulatory authorities and the general public; (6) as a result of the foregoing, the clinical trials for AZD1222 had not been conducted in accordance with industry best practices and acceptable standards and the data and conclusions that could be derived from the clinical trials was of limited utility; and (7) as a result of the foregoing, AZD1222 was unlikely to be approved for commercial use in the United States in the short term, one of the largest potential markets for the drug.