NextCure, Inc. (NXTC) Accused of Misleading Shareholders
During the class period, defendants misled investors regarding the efficacy of and objective responses observed in patients treated with NC318 from the Company’s Phase 1 Clinical Trial. Specifically, on November 5, 2019, NextCure made positive statements regarding its Phase 1 Clinical Trial in connection with the 34th Annual Meeting of Society for Immunotherapy of Cancer, reporting a disease control rate of 71% while committing to present results for the 43 patients dosed with NC318. According to the media and analysts, “expectations for NextCure and NC 318 [] soar because … NC318 could become as popular as Keytruda if clinical trial results continue to impress.” On this news, NextCure’s stock closed at $92.22 per share, up nearly 250% from the previous day’s close.
On November 19, 2019, NextCure closed its SPO, raising $172.2 million in gross proceeds. The offering documents touted the efficacy and effectiveness of NC318.
Then, on July 13, 2020, NextCure announced the departure of its Chief Medical Officer and that it was no longer planning to “advance the non-small cell lung cancer (NSCLC) and ovarian cancer cohorts in the stage 2 portion of the Simon 2-stage trial.” On this news, analysts slashed price targets from as high as $87 to as low as $13. As a result, NextCure’s shares dropped over 54% the next trading day to close at $8.15 per share on July 13, 2020.
