Key Takeaways:
Regeneron lost $11 billion in market value after its Phase 3 melanoma trial failed, triggering a securities class action.
"We're focused on whether Regeneron altered the trial protocol without timely telling investors to intentionally mislead them because the defendants knew the so-called blockbuster potential for the combination wasn't really there," Reed Kathrein, the Hagens Berman partner leading the firm's investigation, said.
The study of Fianlimab plus Libtayo (cemiplimab) as a first-line treatment for metastatic or locally advanced melanoma missed its primary endpoint of improved progression-free survival, the company said May 15 after market close. Shares fell $102.09, or 13.95%, from the class period high of $731.77 on April 28 to $629.68. Regeneron had characterized the combination as a "potential blockbuster."
Investors who bought REGN shares between Aug. 1, 2025 and May 15, 2026 have until Sept. 14 to seek appointment as lead plaintiff. The complaint, filed in the Southern District of New York, alleges Regeneron used flawed statistical assumptions and failed to disclose that the active treatment arm was not achieving meaningful differentiation over standard therapies.
On April 29, Regeneron disclosed a protocol amendment expanding the progression-free survival analysis to all patients with at least six months of follow-up. On May 12, the company admitted the change was made in response to "slow event rates," had been decided nearly six months earlier, and was submitted to global regulators in November and December.
The lawsuit, brought under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, contends management repeatedly assured investors of confidence in the trial even as events slowed, at one point saying the slowing event rates were "because the test arms are performing well."
The failed trial removes a key growth driver from Regeneron's oncology pipeline, which also includes the approved PD-1 inhibitor Libtayo (cemiplimab) competing with Merck's Keytruda (pembrolizumab) and Bristol Myers Squibb's Opdivo (nivolumab). Investors will watch for a settlement or further disclosures ahead of the Sept. 14 lead plaintiff deadline.
This article is for informational purposes only and does not constitute investment advice.
