Shareholder Class Action Against Acer Therapeutics, Inc. (ACER) Survives Motion to Dismiss
Acer misrepresented that a conversation it had with the U.S. Food and Drug Administration regarding its drug candidate EDVISO. Acer claimed publicly that “the FDA agreed that additional clinical development is not needed” for the drug. Acer went on to raise almost $59 million in two offerings based on this information. However, contrary to Acer’s public comments, the FDA had not approved the new drug application for EDVISO. In June 2019, when Acer revealed that the FDA needed it to “conduct an adequate and well-controlled trial” to determine EDVISO’s effects in patients, Acer’s stock price fell $15.16 per share, or over 75%, to close at $4.12 per share. On June 16, 2020, U.S. District Court Judge Gregory H. Woods denied in part Acer’s motion to dismiss plaintiffs’ claims, stating that plaintiffs had plausibly alleged securities fraud claims. On July 21, 202, Judge Woods subsequently denied Defendants’ motion to reconsider his decision, paving the way for litigation to proceed.