Flex Pharma, Inc. ( FLKS ) Accused of Overstating the Approval Prospects for Its ALS Drug
According to the complaint, in August 2017, Flex Pharma, Inc. ( FLKS ) began its COMMEND trial to evaluate FLX-787 with a focus on treatment for ALS, and in October 2017, initiated its COMMIT trial to evaluate FLX-787 in Charcot-Marie-Tooth patients. Flex subsequently reported encouraging results that the company believed demonstrated the “clear potential of FLX-787 to reduce painful cramps and spasms” in its patients. Flex further stated that positive topline data for FLX-787 showed a statistically significant 27.3% reduction in the frequency of spasms compared with control and that the drug was generally well-tolerated with no drug-related serious adverse events. On June 13, 2018, Flex suddenly revealed that it was stopping the COMMEND and COMMIT trials, citing oral tolerability concerns. Flex further disclosed that it was reducing its workforce by approximately 60% and that its Board is exploring “the potential sale or merger of the company.” On this news, Flex’s share price plunged over 75% to close at $1.04 per share on June 13, 2018.
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