Centessa Pharmaceuticals plc (CNTA) Made False and Misleading Statements Regarding its Product Candidates in Connection with its IPO
A shareholder filed a class action on behalf of all persons and entities that purchased Centessa Pharmaceuticals plc (NASDAQ: CNTA) American Depository Shares (ADS) pursuant to the Company’s May 28, 2021, initial public offering (“IPO”) and/or between May 28, 2021 and June 1, 2022. Centessa is a clinical-stage pharmaceutical company that purports to discover, develop, and deliver medicines to patients. The Company’s development pipeline includes, among other products, lixivaptan, in Phase 3 clinical development for the treatment of autosomal dominant polycystic kidney disease (“ADPKD”), and ZF874, which is in Phase 1 clinical development for the treatment of A1AT deficiency (“AATD”).
According to the complaint, Centessa conducted its IPO in May 2021, offering shares at $20 per ADS for proceeds of $306.9 million. In both the Offering Documents and throughout the class period, defendants failed to disclose that: (i) lixivaptan was less safe than Defendants had represented; (ii) Defendants overstated lixivaptan’s clinical and commercial prospects; (iii) ZF874 was less safe than Defendants had represented; and (iv) defendants overstated ZF874’s clinical and commercial prospects while downplaying the drug’s safety issues.
On November 1, 2021, Centessa issued a press release announcing results from the Phase 1 study evaluating ZF874 in treating AATD, including, among other results, potential safety issues related to increases in liver enzymes alanine aminotransferase (“ALT”) and aspartate aminotransferase (“AST”) in one of the study subjects. On this news, Centessa’s ADS price fell $3.19 per share, or 18.55%, to close at $14.01 per share on November 1, 2021.
On June 2, 2022, Centessa announced “it has made the strategic decision to discontinue development of lixivaptan for [ADPKD,]” citing “a recent observation of [ALT] and [AST] elevations in one subject” from a Phase 3 study of lixivaptan that was designed to assess liver and non-liver safety in certain subjects. On this news, Centessa’s ADS price fell $1.25 per share, or 27.78%, to close at $3.25 per share on June 2, 2022.
Then, on August 10, 2022, Centessa issued a press release “announc[ing] its decision to discontinue development of ZF874 following a recent report of an adverse event (AE) involving elevated liver enzymes (AST/ALT) in a . . . subject dosed with 5 mg/kg BID of ZF874 in the Phase 1 study.” Centessa stated that “[b]ased on the results observed to date, the Company concluded that ZF874 was unlikely to achieve the desired target product profile.” On this news, Centessa’s ADS price fell $0.26 per share, or 5.19%, to close at $4.75 per share on August 10, 2022, representing a total decline of 76.25% from the $20.00 per ADS Offering price.
Next Steps: If you acquired shares of Centessa Pharmaceuticals plc pursuant to the Company’s IPO or between May 28, 2021 and June 1, 2022, you have until November 28, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.