Brainstorm Cell Therapeutics (NASDAQ:BCLI) Inc., a biotech firm focusing on cellular therapies for neurodegenerative diseases, is facing a class action lawsuit filed by investors. The lawsuit alleges that the company made false and misleading statements between August 15, 2022, and September 27, 2023, violating Federal Securities Laws. These statements are said to have led to an artificial inflation of Brainstorm's stock price, which subsequently dropped significantly following negative developments with the company's ALS drug.
On September 27, 2023, the U.S. Food and Drug Administration (FDA) rejected Brainstorm's ALS drug NurOwn. The FDA's briefing document highlighted that the Biologics License Application (BLA) was scientifically incomplete and had significant deficiencies in manufacturing information. This rejection came after Brainstorm decided to proceed with a "filing over protest" regulatory procedure despite having received a refusal to file letter from the FDA in November 2022.
The fallout from these events resulted in Brainstorm's stock price plummeting from $3.29 per share in May 2023 to just $0.16 per share on October 03, 2023. The Gross Law Firm, recognized for advocating investors' rights, has issued a notice to shareholders urging them to consider lead plaintiff appointment for the class period mentioned above. Shareholders seeking to join the class action lawsuit have until January 2, 2024, to register their interest.
Investors who experienced losses due to the alleged misinformation are being represented by the New York-based Gross Law Firm in seeking recovery. The firm has made it clear that there is no cost or obligation for shareholders to register for this class action, and they will be kept updated on the status via portfolio monitoring software.
Affected investors are advised to contact either the Gross Law Firm or the Shareholders Foundation for further information before the January deadline. The firms have provided their respective contact details for shareholders who wish to inquire about their legal options.
InvestingPro Insights
Given the recent developments at Brainstorm Cell Therapeutics Inc., it's crucial to examine some key metrics provided by InvestingPro. The company has a market cap of $9.45M and a negative P/E ratio of -0.33, indicating that it's not currently profitable. Over the last six months, the company's stock price has seen a significant drop of approximately 93.3%, aligning with the fallout from the FDA's rejection of their ALS drug.
InvestingPro Tips highlight that the company is quickly burning through cash and operates with a poor return on assets. The stock generally trades with high price volatility, which is evident in the recent drastic fall in stock price. Additionally, it's worth noting that the company's stock price often moves in the opposite direction of the market.
For investors seeking more comprehensive insights, InvestingPro offers an extensive list of additional tips and real-time data metrics. This valuable information can help investors make informed decisions, particularly in volatile and uncertain market conditions.
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