What's Happening?
Robbins LLP, a shareholder rights law firm, has filed a class action lawsuit on behalf of investors who purchased REGENXBIO, Inc. securities between February 9, 2022, and January 27, 2026. The lawsuit alleges that REGENXBIO misled investors about the viability of its drug candidate RGX-111, which was intended for the treatment of MPS I. Despite positive interim reports, the company allegedly knew of serious safety issues, including the potential for CNS neoplasm. In November 2023, REGENXBIO deprioritized RGX-111 and sought strategic alternatives. On January 28, 2026, the FDA placed a clinical hold on RGX-111 and RGX-121, leading to a significant drop in the company's stock price.
Why It's Important?
This lawsuit highlights the risks associated with investing in clinical-stage
biotechnology companies, where drug development is fraught with uncertainties. The allegations of misleading investors could have significant financial implications for REGENXBIO and its shareholders. The case underscores the importance of transparency and accurate reporting in maintaining investor trust and could lead to increased scrutiny of biotech companies' communications with investors. The outcome of this lawsuit may influence corporate governance practices and investor relations strategies in the biotechnology sector.
What's Next?
Investors who wish to serve as lead plaintiffs in the class action must submit their papers by April 14, 2026. The case will proceed through the legal system, potentially leading to a settlement or court decision. The lawsuit may prompt REGENXBIO to reassess its communication strategies and regulatory compliance practices. Other biotech companies may also review their investor relations policies to avoid similar legal challenges.
