Athenex, Inc

On September 1, 2020, the Company announced that the U.S. Food and Drug Administration (“FDA”) accepted Athenex’s New Drug Application (“NDA”) for oral paclitaxel and encequidar in metastatic breast cancer with priority review.

on March 1, 2021, before the market opened, Athenex disclosed receipt of a Complete Response Letter (“CRL”) from the FDA stating that the NDA would not be approved in its current form. According to the CRL, “the FDA indicated its concern of safety risk to patients in terms of an increase in neutropenia-related sequalae on the Oral Paclitaxel arm compared to the IV paclitaxel arm.” The Company stated that the “FDA also expressed concerns regarding the uncertainty over the results of the primary endpoint of objective response rate (ORR) at week 19 conducted by blinded independent centra review (BICR) [because] the BICR reconciliation and re-read process may have introduced unmeasured bias and influence on the BICR.” As a result, the FDA had recommended that Athenex conduct additional clinical trials and employ certain risk mitigation strategies to improve toxicity.

On this news, the Company’s stock price fell $6.64, or 55%, to close at $5.46 per share on March 1, 2021, thereby injuring investors.

Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the data included in the Oral Paclitaxel plus Encequidar NDA presented a safety risk to patients in terms of an increase in neutropenia-related sequalae; (ii) the uncertainty over the results of the primary endpoint of objective response rate (ORR) at week 19 conducted by BICR; (iii) the BICR reconciliation and re-read process may have introduced unmeasured bias and influence on the BICR; (iv) that the Company’s Phase 3 study that was used to file the NDA was inadequate and not well-conducted in a patient population with metastatic breast cancer representative of the U.S. population, such that the FDA would recommended a new such clinical trial; (v) as a result, it was foreseeable that the FDA would not approve the Company’s NDA in its current form; and (vi) as a result, the Company’s public statements were materially false and misleading at all relevant times.