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MANHATTAN (CN) — Regeneron Pharmaceuticals investors claim the American biotech company inflated its stock price by overstating the promise of a skin cancer treatment before revealing its clinical trial failed to meet the benchmarks needed for approval.
Filed Thursday in the Southern District of New York, investor Allen Cheatham claims Regeneron and its top executives touted the potential of a phase III clinical trial of fianlimab in combination with cemiplimab as a first-line treatment for metastatic or locally advanced melanoma while mischaracterizing the risk the study would fail because of prolonged slowdowns in event accrual.
Cheatham points to statements by Regeneron co-founder, President and CEO George D. Yancopoulos describing the drug combination as a “potential blockbuster,” even as the trial upended the company’s assumptions about its efficacy.
Cheatham says the omissions of the trial findings “were committed willfully or with reckless disregard for the truth.”
Represented by Manhattan firm Levi & Korsinsky, Cheatham says Regeneron (NASDAQ: REGN) “repeatedly and affirmatively represented to investors that Regeneron was well-positioned to achieve a practice-changing and clinically differentiated efficacy profile to capture the claimed multi-billion-dollar metastatic melanoma market,” while minimizing the known impact of event accrual delays on the study’s chances of success.
“Defendants repeatedly and falsely characterized this slowdown as a likely positive development that reflected the durable efficacy of the active treatment arms, while knowingly or recklessly disregarding that the actual risk of clinical failure had dramatically increased due to the nature of the delay,” Cheatham says in the complaint. “Defendants’ representations regarding the nature and impact of the slowdown mischaracterized the actual risk of failure that the study was facing.”
The class of investors says Regeneron’s share price dropped 6.2% to $686.36 per share after disclosures during an April 29, 2026, earnings call that the company had issued a last-minute amendment to the study’s protocol to expand the eligible patient pool for the primary endpoint analysis.
Two weeks later, Regeneron shares declined nearly 10% in the span of one day to $629.68 per share on May 18, 2026, after the company issued a press release announcing that the “Phase 3 Trial of Fianlimab . . . did not reach statistical significance for the primary endpoint of improvement in progression-free survival (PFS).”
Representatives for Regeneron, headquartered in Tarrytown, New York, did not immediately respond to a request for comment Friday.
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