NEW YORK, July 10, 2021 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Frequency Therapeutics, Inc. ("Frequency" or the "Company") (NASDAQ: FREQ) and certain of its officers. The class action, filed in the United States District Court for the District of Massachusetts, and docketed under 21-cv-11040, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Frequency's common stock between November 16, 2020 and March 22, 2021, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). This action brings claims against Defendants Frequency and the Company's Chief Executive Officer ("CEO"), David L. Lucchino ("Lucchino"), and seeks to recover damages caused by Defendants' violations of the Exchange Act.
If you are a shareholder who purchased Frequency securities during the Class Period, you have until August 2, 2021 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
Frequency is a publicly-traded pharmaceutical company. Headquartered in Woburn, Massachusetts and incorporated in Delaware, Frequency is focused on the development and commercialization of a hearing loss treatment titled "FX-322," which the Company has long promoted as a potential treatment for patients with severe sensorineural hearing loss ("SNHL").
The complaint alleges that, shortly after launching the Phase 2a trial, Frequency and CEO Lucchino learned that the Phase 2a trial results revealed no discernible difference between FX-22 and the placebo. The complaint also alleges that while Frequency's stock price remained artificially inflated, defendant Lucchino sold over 350,00 Frequency shares, receiving over $10.5 million in proceeds from the sale.
Frequency has conducted multiple clinical trials assessing the safety and efficacy of FX-322, the most significant of which was a Phase 2a trial, which began in October 2019. Each participant in the Phase 2a trial was given a four-dose regimen of FX-322 (or a placebo), which consisted of a single injection of the drug (or placebo) four weeks in a row. Frequency then assessed the results 90 days after completion of the regimen and again in the months after.
Shortly thereafter, Defendants learned that the Company's Phase 2a trial results failed to live up to the Company's expectations as the results revealed no discernable difference between FX-322 and the placebo.
Despite the disappointing results, the Company continued to conduct the Phase 2a study while releasing positive statements in earnings calls, press releases, U.S. Securities and Exchange Commission filings, and pharmaceutical presentations about FX-322's potential. These statements materially misled the market and artificially inflated the value of Frequency's common stock.
Seizing on the Company's artificially high share price, in April 2020 Defendant Lucchino began selling his shares of Frequency, initially dumping between 10,000 and 20,000 shares—earning hundreds of thousands of dollars—each month and then increasing the number of sales to 60,000 to 80,000 shares—earning millions of dollars—each month as Frequency's deadline for releasing the disastrous Phase 2a results drew near. All told, Lucchino sold over 350,000 shares and earned over $10.5 million.
Before the market opened on Tuesday, March 23, 2021, Frequency disclosed in a press release deeply disappointing interim Phase 2a results, revealing that subjects with mild to moderate SNHL did not demonstrate improvements in hearing measures versus placebo.
These results dramatically undercut the narrative that the Company had spun since Frequency's IPO and investors reacted accordingly. That day, Frequency's shares fell from $36.29 to $7.99, a 78% drop, representing a decline in the Company's market capitalization of approximately $955 million.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 7980
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SOURCE Pomerantz LLP
