June 3, 2021 - An investor in shares of Frequency Therapeutics, Inc. (NASDAQ: FREQ) filed a lawsuit in the U.S. District Court for the District of Massachusetts over alleged violations of Federal Securities Laws by Frequency Therapeutics, Inc. in connection with certain allegedly false and misleading statements made between November 16, 2020, and March 22, 2021.
Woburn, MA based Frequency Therapeutics, Inc., a clinical-stage biotechnology company, focuses on harnessing the body's innate biology to repair or reverse damage caused by a broad range of degenerative diseases.
On or around October 2, 2019, Frequency Therapeutics, Inc conducted its initial public offering ("IPO"), selling 6,000,000 shares of common stock priced at $14.00 per share. Frequency Therapeutics, Inc. began its Phase 2a trial for FX-322 in October 2019. The trial results failed to live up to the Company’s expectations, as they revealed no discernable difference between FX-322 and the placebo. However, the Company continued to conduct the trial and released positive statements in earnings calls, press releases, SEC filings, and pharmaceutical presentations about FX-322’s potential.
During this period, CEO David Lucchino sold over 350,000 shares valued near $9 million in the months prior to releasing the results of the Phase 2a trial. On March 23, 2021, Frequency announced the topline, day-90 data from its FX-322 Phase 2a study (FX-322-202). Frequency Therapeutics, Inc disclosed that "[t]he interim results show that four weekly injections in subjects with mild to moderately severe sensorineural hearing loss (SNHL) did not demonstrate improvements in hearing measures versus placebo."
Shares of Frequency Therapeutics, Inc. (NASDAQ: FREQ) declined to as low as $7.34 per share on March 30, 2021.
According to the complaint the plaintiff alleges on behalf of purchasers of Frequency Therapeutics, Inc. (NASDAQ: FREQ) common shares between November 16, 2020, and March 22, 2021, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between November 16, 2020, and March 22, 2021, the defendants made false and/or misleading statements and/or failed to disclose that Frequency's development and commercialization of a hearing loss treatment titled "FX-322" was not producing the results Frequency desired, that FX-322's ongoing clinical study was not as positive as Frequency portrayed, and that as a result of the foregoing, defendants' positive statements about Frequency's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.