Acer Therapeutics Execs Face Investigation for False Statements

Schubert Jonckheer & Kolbe LLP is investigating potential shareholder derivative claims on behalf of stockholders of Acer Therapeutics Inc. (NYSE: ACER) related to the company’s statements about its discussions with the U.S. Food and Drug Administration for Acer’s EDSIVO drug candidate. The FDA later rejected Acer’s New Drug Application for EDSIVO in June 2019.

In 2017 and 2018, Acer claimed that “the FDA agreed” at a September 2015 meeting that additional clinical development and trials were not needed for approval of Acer’s forthcoming EDSIVO application. At the time, EDSIVO was one of only three clinical-stage drugs in Acer’s pipeline. Acer later announced on June 25, 2019 that the FDA rejected its EDSIVO New Drug Application, noting that Acer would need to conduct a well-designed clinical trial before it would consider approval. On this news, Acer’s stock price fell $15.16 per share, or 79%, to close at $4.12 per share.

This conduct has exposed the company to securities litigation currently pending in the U.S. District Court for the Southern District of New York where it is alleged that Acer misled investors about its discussions with the FDA concerning EDSIVO, causing Acer’s stock to trade at artificially high levels. The complaint also alleges that, in a scheme to keep the company afloat and raise capital, Acer deliberately or recklessly misrepresented that the FDA agreed that it would approve EDSIVO. On June 16, 2020, U.S. District Judge Gregory H. Woods partially denied the defendants’ motion to dismiss the case, finding that the plaintiff met the heightened pleading standards for alleged securities fraud, including alleging facts sufficient to create a “strong inference of scienter,” or intent to defraud investors.

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