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Melbourne-based Telix Pharmaceuticals’ (ASX: TLX) is facing a potential class action lawsuit in the US over allegations that the company misled shareholders regarding the progress it is making with its prostate cancer therapeutic candidates.
California-based Gross Law Firm has reached out to shareholders of the company to secure a lead plaintiff who bought shares in the company between 21 February and 28 August this year.
The law firm is alleging that during this period Telix issued “materially false and/or misleading statements” regarding its prostate cancer candidates.
The firm is alleging that Telix “materially overstated” the progress the company had made with the prostate treatments it is producing and that it materially overstated the quality of its supply chain and partners.
“As a result, defendants' statements about Telix's business, operations and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times,” says the law firm.
Telix’s main prostate cancer candidate is TLX591, an antibody-drug conjugate therapy developed to treat metastatic castration-resistant prostate cancer.
The drug is currently in phase three trials with the company announcing to the ASX last week that the first patient - at Melbourne’s Australian Prostate Centre - has been dosed in part two of its global study.
The company also has two radioactive diagnostic agents, Illuccix and Gozellix, which are approved by the US Food and Drug Administration (FDA).
Sales from these agents helped Telix report a 53 per cent increase in third-quarter revenue to US$206 million ($318.2 million).
Business News Australia has sought comment from Telix Pharmaceuticals regarding the potential class action.
Gross Law Firm is in the preliminary stages of investigating the merits of proceeding with the lawsuit.
The firm is seeking registrations from Telix shareholders to join the action with a deadline of 9 January 20206 for a lead plaintiff to be appointed.
Exact details of the potential lawsuit are yet to be disclosed.
However, the period indicated by the firm includes the day after Telix released its FY25 half-year result when shareholders learned that it lifted revenue by 56 per cent to $783.2 million.
Shares in Telix closed at $30.12 on 21 February following the profit result announcement but fell to $14.95 by 28 August this year.
The company’s share price has been impacted by a number of setbacks this year, including on 28 August when it announced receipt of a Complete Response Letter from the FDA for the company’s Biologics License Application for TLX250-CDx.
The investigational PET (positron emission tomography) agent is being developed for diagnosing clear cell carcinoma, which is the most aggressive and common kidney cancer.
Telix co-founder and CEO Dr Christian Behrenbruch said at the time that the company believed the “outstanding matters” raised by the FDA were “resolvable”.
In July this year, Telix also revealed that it had received a subpoena from the US Securities and Exchange Commission (SEC) seeking documents and information relating to the company’s disclosures over the development of the prostate cancer therapeutic candidates.
The company at the time that the SEC request did not mean that Telix “or anyone else” violated US federal securities laws or that the SEC "has a negative opinion of any person, entity or security".
“While the matter is ongoing, Telix will continue with its clinical development programs relating to its prostate cancer therapy candidates, in the ordinary course of business,” said the company.
Telix Pharmaceuticals shares were trading at $12.96 at 10.56am (AEDT) today, down 21c.
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