Pomerantz LLP announces that a class action lawsuit has been filed against Ardelyx, Inc. and certain of its officers. The class action was filed in the United States District Court for the Northern District of California, Oakland Division, and docketed under 21-cv-06228. Plaintiff brings this federal securities class action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5, on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased Ardelyx securities between August 6, 2020 and July 19, 2021, inclusive (the “Class Period”), and who were damaged thereby (the “Class”).
If you are a shareholder who purchased or otherwise acquired Ardelyx securities during the Class Period, you have until September 28, 2021 to ask the Court to appoint you as Lead Plaintiff for the Class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Ardelyx is a specialized biopharmaceutical company focused on developing first-in-class medicine to improve treatment for people with cardiorenal disease. This includes patients with chronic kidney disease (“CKD”) on dialysis suffering from elevated serum phosphorus, or hyperphosphatemia; and CKD patients and/or heart failure patients with elevated serum potassium, or hyperkalemia.
The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding tenapanor and the likelihood that it would be approved by the U.S. Food and Drug Administration (“FDA”). Defendants possessed, were in control over, and, as a result, knew (or had reason to know) that the data submitted to support a New Drug Application (“NDA”) for tenapanor was insufficient in that it showed a lack of clinical relevance of the drug’s treatment effect, making it foreseeably likely (if not certain) that the FDA would not approve the drug.
In June 2020, Defendants submitted an NDA to the FDA for Ardelyx’s lead product candidate, tenapanor, a supposedly first-in-class medicine for the control of serum phosphorus in adult patients with CKD on dialysis. According to Ardelyx, tenapanor has “a unique mechanism of action and acts locally in the gut to inhibit the sodium hydrogen exchanger 3, or NHE3,” resulting in the “tightening of the epithelial cell junctions, thereby significantly reducing paracellular uptake of phosphate, the primary pathway of phosphate absorption.” If approved, tenapanor “would be the first therapy for phosphate management that blocks phosphorus absorption at the primary pathway of uptake[,]” and “could greatly improve patient adherence and compliance with one single pill dosed twice daily in contrast to current therapies where typically multiple pills are taken before every meal.” Thus, tenapanor (and its promise) was widely touted by Defendants and, accordingly, extremely important to the valuation (and future success) of Ardelyx securities.
The FDA accepted Ardelyx’s NDA in September 2020 and set a Prescription Drug User Fee Act (“PDUFA”) date of April 29, 2021.
The Company repeatedly lauded this development, highlighting the FDA’s acceptance and review of the NDA, supported by so-called “successful” Phase 3 studies, in each subsequently filed quarterly report and in the Company’s 2020 annual report. Even when the FDA requested that the Company provide additional information related to Ardelyx’s clinical data, which caused the PDUFA date to slip by three months, Defendants continued to hype Ardelyx’s “positive” clinical trial results, which, according to them, showed “improvements” over current treatments, supported tenapanor’s “clinical safety and efficacy,” and reinforced its “potential” as a “transformative” treatment. At no point did Defendants state (much less suggest) that there may be fatal issues with the drug, its clinical trial data, or both. Rather, Defendants simply claimed that the FDA’s request was merely because they needed help to “better understand the clinical data in light of tenapanor’s novel mechanism of action as compared to approved therapies.”
Defendants’ rosy narrative, however, came to a halt after the market closed on July 19, 2021. At that time, Ardelyx announced that it had received a letter from the FDA, dated July 13, 2021, that said the administration had found deficiencies that precluded discussion around the would-be labeling and post-marketing requirements for tenapanor. Critically, the FDA said it detected issues with both the size and clinical relevance of the drug’s treatment effect.
Immediately, analysts cut their price targets and downgraded the Company’s rating. Piper Sandler, for example, rated Ardelyx neutral (down from a buy-equivalent rating) and wrote, “we struggle to see a path forward for Tenapanor.” Raymond James, another analyst, reset the Company’s price target to $4.00 from $14.00 per share.
The Company’s share price likewise plummeted, falling $5.69 per share, or nearly 74%, in a single day, to close at $2.01 per share on July 20, 2021, before falling another 4.2% by market close on July 21, 2021.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980