Biopharma faces lawsuit over documents supporting its US$250m IPO

Brain disease-focused biopharma Neomora Therapeutics is facing a potential law suit over claims it misled shareholders who took part in its US£250m IPO in 2023.

Law firm Robbins LLP is investigating allegations that it misled investors in the offering of documents which supported its IPO.

Since the IPO, the value of Neumora common stock has declined by 88.7 per cent from the IPO price of US$17 per share to a closing price of US$1.91 per share last week.

According to the complaint, the company failed to disclose or misrepresented facts regarding the prospects of Navacaprant, the company’s flagship candidate aimed at treating major depressive disorder (MDD).

These include the fact that Neumora was forced to amend original phase two trial inclusion criteria to include a patient population with moderate to severe MDD to show that Navacaprant offered a statistically significant improvement in treating MDD.

It also added a prespecified analysis to the phase two statistical analysis plan, focusing on patients suffering from moderate to severe MDD. Also the phase two trials lacked adequate data, complainants say, particularly in regards to the patient population size and the ratio of male to female patients within the patient population, to be able to accurately predict the results of its KOASTAL-1 study.

The complaint alleges that on January 2, the undisclosed adverse facts became known when Neumora issued a press release announcing the results from the KOASTAL-1 study of Navacaprant for the treatment of moderate to severe MDD.

The press release revealed that the KOASTAL-1 study failed to “demonstrate a statistically significant improvement on the primary endpoint of change from baseline in the Montgomery-Åsberg Depression Rating Scale (‘MADRS’) total score at Week 6 or the key secondary endpoint of a change from baseline in the Snaith-Hamilton Pleasure Scale (‘SHAPS’) scale.”