Cases
Axsome Therapeutics, Inc.
Corporate Governance / Derivative
Overview
Overview
- Date:
- 4/17/2024
- Company Name:
- Axsome Therapeutics, Inc.
- Stock Symbol:
- AXSM
- Class Period:
- FROM 12/30/2019 TO 4/22/2022
- Status:
- Filed
- Filing Date:
- 5/13/2022
- Court:
- U.S. District Court: Southern District of New York
Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Axsome Therapeutics, Inc. (NASDAQ: AXSM) on behalf of long-term stockholders following a class action complaint that was filed against Axsome on May 13, 2022 with a Class Period from December 30, 2019 to April 22, 2022. Our investigation concerns whether the board of directors of Axsome have breached their fiduciary duties to the company.
Axsome is a biopharmaceutical company that engages in the development of novel therapies for central nervous system disorders in the United States. The Company is developing, among other product candidates, AXS-07, a novel, oral, rapidly absorbed, multi-mechanistic, and investigational medicine for the acute treatment of migraine.
Axsome consistently touted AXS-07’s regulatory and commercial prospects in anticipation of the Company’s submission a New Drug Application (“NDA”) to the U.S. Food and Drug Administration (“FDA”) for AXS-07 for the acute treatment of migraine (the “AXS-07 NDA”) based on the drug’s positive results in two Phase 3 trials. However, unbeknownst to investors, the Company’s preparation and eventual submission of the AXS-07 NDA was plagued with chemistry, manufacturing, and control (“CMC”) issues.
The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Axsome’s CMC practices were deficient with respect to AXS-07 and its manufacturing process; (ii) as a result, Axsome was unlikely to submit the AXS-07 NDA on its initially represented timeline; (iii) the foregoing CMC issues remained unresolved at the time that the FDA reviewed the AXS-07 NDA; (iv) accordingly, the FDA was unlikely to approve the AXS-07 NDA; (v) as a result of all the foregoing, Axsome had overstated AXS-07’s regulatory and commercial prospects; and (vi) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On November 5, 2020, Axsome issued a press release reporting the Company’s third quarter 2020 results. That press release disclosed that the Company “plans to submit the [AXS-07] NDA to the FDA in the first quarter of 2021, versus previous guidance of the fourth quarter of 2020, to allow for inclusion of supplemental manufacturing information to ensure a robust submission package.”
On this news, Axsome’s stock price fell $5.22 per share, or 6.99%, to close at $69.51 per share on November 5, 2020.
Then, on April 25, 2022, Axsome disclosed in a filing with the U.S. Securities and Exchange Commission that, “[o]n April 22, 2022, Axsome . . . was informed by the [FDA] that [CMC] issues identified during the FDA’s review of the Company’s [NDA] for its AXS-07 product candidate for the acute treatment of migraine are unresolved.” That filing also disclosed that “[b]ased upon the time remaining in the NDA review cycle, the Company expects to receive a Complete Response Letter [(‘CRL’)] with respect to this NDA on or about the Prescription Drug User Fee Act target action date of April 30, 2022.”
On this news, Axsome’s stock price fell $8.60 per share, or 21.99%, to close at $30.50 per share on April 25, 2022.
Finally, on May 2, 2022, Axsome announced that it received a CRL from the FDA regarding the AXS-07 NDA for the acute treatment of migraine. According to the Company, “[t]he principal reasons given in the CRL relate to [CMC] considerations” including “the need for additional CMC data pertaining to the drug product and manufacturing process.”
If you are a long-term stockholder of Axsome, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, by telephone at (212) 355-4648, or by filling out the form below. There is no cost or obligation to you.
Axsome is a biopharmaceutical company that engages in the development of novel therapies for central nervous system disorders in the United States. The Company is developing, among other product candidates, AXS-07, a novel, oral, rapidly absorbed, multi-mechanistic, and investigational medicine for the acute treatment of migraine.
Axsome consistently touted AXS-07’s regulatory and commercial prospects in anticipation of the Company’s submission a New Drug Application (“NDA”) to the U.S. Food and Drug Administration (“FDA”) for AXS-07 for the acute treatment of migraine (the “AXS-07 NDA”) based on the drug’s positive results in two Phase 3 trials. However, unbeknownst to investors, the Company’s preparation and eventual submission of the AXS-07 NDA was plagued with chemistry, manufacturing, and control (“CMC”) issues.
The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Axsome’s CMC practices were deficient with respect to AXS-07 and its manufacturing process; (ii) as a result, Axsome was unlikely to submit the AXS-07 NDA on its initially represented timeline; (iii) the foregoing CMC issues remained unresolved at the time that the FDA reviewed the AXS-07 NDA; (iv) accordingly, the FDA was unlikely to approve the AXS-07 NDA; (v) as a result of all the foregoing, Axsome had overstated AXS-07’s regulatory and commercial prospects; and (vi) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On November 5, 2020, Axsome issued a press release reporting the Company’s third quarter 2020 results. That press release disclosed that the Company “plans to submit the [AXS-07] NDA to the FDA in the first quarter of 2021, versus previous guidance of the fourth quarter of 2020, to allow for inclusion of supplemental manufacturing information to ensure a robust submission package.”
On this news, Axsome’s stock price fell $5.22 per share, or 6.99%, to close at $69.51 per share on November 5, 2020.
Then, on April 25, 2022, Axsome disclosed in a filing with the U.S. Securities and Exchange Commission that, “[o]n April 22, 2022, Axsome . . . was informed by the [FDA] that [CMC] issues identified during the FDA’s review of the Company’s [NDA] for its AXS-07 product candidate for the acute treatment of migraine are unresolved.” That filing also disclosed that “[b]ased upon the time remaining in the NDA review cycle, the Company expects to receive a Complete Response Letter [(‘CRL’)] with respect to this NDA on or about the Prescription Drug User Fee Act target action date of April 30, 2022.”
On this news, Axsome’s stock price fell $8.60 per share, or 21.99%, to close at $30.50 per share on April 25, 2022.
Finally, on May 2, 2022, Axsome announced that it received a CRL from the FDA regarding the AXS-07 NDA for the acute treatment of migraine. According to the Company, “[t]he principal reasons given in the CRL relate to [CMC] considerations” including “the need for additional CMC data pertaining to the drug product and manufacturing process.”
If you are a long-term stockholder of Axsome, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, by telephone at (212) 355-4648, or by filling out the form below. There is no cost or obligation to you.
The individual or institution below (“Plaintiff”) has reviewed and agrees to the Bragar Eagel & Squire, P.C. (“BESPC”) retainer agreement and authorizes BESPC to prosecute an action on Plaintiff’s behalf under the federal securities laws or applicable state laws to recover damages on behalf of investors in Axsome Therapeutics. BESPC will prosecute the action on a full contingency basis and will forward all costs and expenses.
Case Updates
Retainer Agreement
This will confirm that you have retained Bragar Eagel & Squire, P.C. (“BESPC”) to represent you in connection with potential litigation against Axsome Therapeutics (the “Company”) and its directors and officers. BESPC has conducted an investigation and believes that there is a valid basis to assert claims against the Company and its directors and/or officers for breach of fiduciary duties and other applicable laws.
In making this agreement, BESPC is relying upon your representation that you held the Company’s shares during the period from 12/30/2019 to 4/22/2022 (the “Relevant Period”) and that you continue to hold Company shares. Please provide us with documentation of your trading history in the Company’s stock by emailing a relevant copies of your brokerage statements to investigations@bespc.com. If you have any questions or need assistance, please call us at (212) 308-5858.
The terms under which we will represent you and your responsibilities as a potential representative plaintiff are set forth below.
You will have an obligation to remain knowledgeable about the litigation and participate in decisions concerning the progress of the litigation. If BESPC is appointed as lead counsel or in a similar capacity in the action, we will provide you with copies of all pleadings in the litigation for your review and approval, circumstances permitting, before they are filed with the court. BESPC will also promptly advise you of any significant developments in the litigation.
As a representative plaintiff, you cannot have any interest antagonistic to or in conflict with other shareholders or the Company concerning the claims we are pursuing or any relationships with any of the named defendants that would in any way impair your ability or incentive to obtain the best possible result. You agree that neither you nor any of your affiliates or agents will trade stocks while in the possession of any material non-public information you may receive in connection with the litigation. In addition, as a representative plaintiff, you may be required to continue holding Company shares. Please contact us before buying or selling Company shares.
BESPC will prosecute this litigation on a contingency basis. You will not be responsible for paying any legal fees, costs, or out-of-pocket expenses arising out of or related to the prosecution of this litigation, regardless of the outcome of the matter. If there is a monetary recovery in this action, BESPC will, at the conclusion of the litigation or any segment thereof, apply to the court for approval of an award of attorneys’ fees and reimbursement of expenses. BESPC may also seek a fee if we obtain substantial non-monetary relief for the Class or the Company. The court will then award fees and disbursements (if any) from the proceeds of any judgment or settlement obtained in this litigation, based on factors considered relevant by the court. Such fees, costs, and disbursements will be paid from the entire settlement amount and not only from your share of the settlement amount.
BESPC may associate with other counsel to assist in the prosecution of this litigation. Any recovery of fees and costs will be shared with such counsel, determined on a percentage basis or based upon the time spent on the matter, as approved by the court if applicable. The division of work and or fees among co-counsel will not affect the amount of fees received upon a successful completion of the litigation. From time to time, BESPC may utilize contract attorneys to supplement the work of its own employed attorneys. BESPC will supervise the work of all contract attorneys and adopt their work product as its own. You authorize BESPC, as we deem appropriate, to associate with other counsel and to hire experts and consultants to assist in the handling of your claims.
It is possible that you will not be appointed as a lead plaintiff in the action. However, we may wish to represent you in other litigation related to the wrongful acts giving rise to this case. In such event, we will contact you to discuss the scope of such representation and obtain your approval before moving forward. You also agree that we may contact you with respect to other potential matters on your behalf.
BESPC will consult with you regarding any settlement negotiations and seek to obtain your approval for any proposed resolution of this litigation before entering into a final settlement agreement with defendants.
You expressly acknowledge that we have not made any representation to you, express or implied, concerning the outcome of any litigation or other matter in which we represent you.
If you are not chosen as a representative plaintiff and we do not choose to pursue other related litigation on your behalf, we will provide you with notification and this Agreement shall terminate. Otherwise, this Agreement shall remain in effect until the conclusion of the relevant litigation. However, you may terminate this Agreement at any time.
Upon termination, BESPC’s files and papers compiled in connection with its investigation and prosecution of this matter constitute the work product and property of BESPC over which it has complete control with respect to its use and/or disclosure.
This agreement sets forth the entire agreement between the parties and supersedes all other oral or written communications.
Please feel free to contact us at any time should you have any questions or comments in this regard.
In making this agreement, BESPC is relying upon your representation that you held the Company’s shares during the period from 12/30/2019 to 4/22/2022 (the “Relevant Period”) and that you continue to hold Company shares. Please provide us with documentation of your trading history in the Company’s stock by emailing a relevant copies of your brokerage statements to investigations@bespc.com. If you have any questions or need assistance, please call us at (212) 308-5858.
The terms under which we will represent you and your responsibilities as a potential representative plaintiff are set forth below.
Your Responsibilities as a Representative Plaintiff
As a representative plaintiff, you will have a duty to represent the interests of similarly situated shareholders and to participate in the prosecution of this litigation. You may also be asked to provide documents concerning your trading in Company stock and may be asked to sit for a deposition. Accordingly, you should preserve all documents that relate to this case until it has concluded or we inform you otherwise. Relevant documents include any information you have about the Company or your trading in Company stock, no matter how it is recorded or who is keeping it for you. If you have any questions about whether information should be retained, please contact us.You will have an obligation to remain knowledgeable about the litigation and participate in decisions concerning the progress of the litigation. If BESPC is appointed as lead counsel or in a similar capacity in the action, we will provide you with copies of all pleadings in the litigation for your review and approval, circumstances permitting, before they are filed with the court. BESPC will also promptly advise you of any significant developments in the litigation.
As a representative plaintiff, you cannot have any interest antagonistic to or in conflict with other shareholders or the Company concerning the claims we are pursuing or any relationships with any of the named defendants that would in any way impair your ability or incentive to obtain the best possible result. You agree that neither you nor any of your affiliates or agents will trade stocks while in the possession of any material non-public information you may receive in connection with the litigation. In addition, as a representative plaintiff, you may be required to continue holding Company shares. Please contact us before buying or selling Company shares.
Contingency Fee and Advancement of Expenses
BESPC will prosecute this litigation on a contingency basis. You will not be responsible for paying any legal fees, costs, or out-of-pocket expenses arising out of or related to the prosecution of this litigation, regardless of the outcome of the matter. If there is a monetary recovery in this action, BESPC will, at the conclusion of the litigation or any segment thereof, apply to the court for approval of an award of attorneys’ fees and reimbursement of expenses. BESPC may also seek a fee if we obtain substantial non-monetary relief for the Class or the Company. The court will then award fees and disbursements (if any) from the proceeds of any judgment or settlement obtained in this litigation, based on factors considered relevant by the court. Such fees, costs, and disbursements will be paid from the entire settlement amount and not only from your share of the settlement amount.
Association with Counsel
BESPC may associate with other counsel to assist in the prosecution of this litigation. Any recovery of fees and costs will be shared with such counsel, determined on a percentage basis or based upon the time spent on the matter, as approved by the court if applicable. The division of work and or fees among co-counsel will not affect the amount of fees received upon a successful completion of the litigation. From time to time, BESPC may utilize contract attorneys to supplement the work of its own employed attorneys. BESPC will supervise the work of all contract attorneys and adopt their work product as its own. You authorize BESPC, as we deem appropriate, to associate with other counsel and to hire experts and consultants to assist in the handling of your claims.
Other Actions
It is possible that you will not be appointed as a lead plaintiff in the action. However, we may wish to represent you in other litigation related to the wrongful acts giving rise to this case. In such event, we will contact you to discuss the scope of such representation and obtain your approval before moving forward. You also agree that we may contact you with respect to other potential matters on your behalf.No Special Treatment
You understand that in the event we secure a recovery, you will not receive any special treatment or receive a greater share of any recovery based on your service as a named plaintiff. However, we may ask the Court to approve an additional award to you to compensate you for the time and effort you expend on this matter. Any such award is solely within the discretion of the Court.
Settlement
BESPC will consult with you regarding any settlement negotiations and seek to obtain your approval for any proposed resolution of this litigation before entering into a final settlement agreement with defendants.
No Guarantee of Success
You expressly acknowledge that we have not made any representation to you, express or implied, concerning the outcome of any litigation or other matter in which we represent you.
Termination of This Agreement
If you are not chosen as a representative plaintiff and we do not choose to pursue other related litigation on your behalf, we will provide you with notification and this Agreement shall terminate. Otherwise, this Agreement shall remain in effect until the conclusion of the relevant litigation. However, you may terminate this Agreement at any time. Upon termination, BESPC’s files and papers compiled in connection with its investigation and prosecution of this matter constitute the work product and property of BESPC over which it has complete control with respect to its use and/or disclosure.
This agreement sets forth the entire agreement between the parties and supersedes all other oral or written communications.
Please feel free to contact us at any time should you have any questions or comments in this regard.