A class action lawsuit was filed against Moderna, Inc. (MRNA) by Levi & Korsinsky on August 9, 2024. The plaintiffs (shareholders) alleged that they bought MRNA stock at artificially inflated prices between January 18, 2023 and June 25, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Moderna stock during that period can click here to learn about joining the lawsuit.
Moderna is a global biotechnology company that discovers, develops, and markets messenger RNA-based therapeutics and vaccines. It focuses on the treatment of infectious diseases, immuno-oncology, rare diseases, autoimmune, and cardiovascular diseases.
Moderna’s claims about mRESVIA (mRNA-1345), an mRNA respiratory syncytial virus (RSV) vaccine, are at the heart of the complaint.
Moderna’s Misleading Claims
According to the lawsuit, MRNA and three of its senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the efficacy of mRNA-1345 and its clinical and/or commercial prospects from SEC filings and related material.
For instance, during the Class Period, the company stated that a review by an independent Data and Safety Monitoring Board (DSMB) showed favorable results for mRNA-1345. It noted that the primary efficacy endpoints, such as vaccine efficacy (VE) of 83.7% against RSV-associated lower respiratory tract disease, were met.
Similarly in a January 30, 2023 press release, the CEO stated that the U.S. FDA (Food and Drug Administration) had assigned a “Breakthrough Designation” for mRNA-1345. This implied that the vaccine had a meaningful health impact on RSV in older adults. The CEO added that the company was looking forward to a productive follow-up with the FDA to safely and quickly commercialize the RSV vaccine for older adults.
Additionally, in the Fiscal 2023 annual report filed on February 24, 2023, Moderna stated that it was developing an RSV vaccine for children and adults. It further added that mRNA-1345 reported positive topline Phase 3 efficacy results in the older population in January 2023.
However, subsequent events (discussed below) revealed that the defendants made misleading statements about the efficacy and prospects of its mRNA-1345 vaccine, leading to disappointment among investors.
Plaintiffs’ Arguments
The plaintiffs maintain that the Defendants deceived investors by lying and withholding critical information about the company’s business practices and prospects during the Class Period. Importantly, the Defendants are accused of misleading investors about the company’s mRNA-1345 vaccine’s efficacy and commercialization prospects.
The truth became clear in events that took place on May 31, 2024 and June 26, 2024. In May, Moderna announced that the FDA approved its mRNA-1345 vaccine for adults aged 60 and above to protect against lower respiratory tract disease caused by RSV infection. However, the company mentioned that the vaccine efficacy was only 78.7%, much lower compared to the 83.7% efficacy revealed earlier in its mRNA-1345 BLA rolling submission to the FDA. MRNA shares fell 5.9% on the news.
Furthermore, in June, Moderna disclosed a significantly lower efficacy range of 49.9% to 50.3% (after 18 months) for the vaccine against multiple symptoms of lower respiratory tract disease. This efficacy range was very low compared to the efficacies displayed by competitor’s vaccines. Moderna released this data at a presentation before the Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices. Following the news, MRNA stock fell 11%.
To conclude, Moderna misled investors about the company’s mRNA-1345 vaccine’s efficacy and commercialization prospects. Year-to-date, MRNA stock has lost 31.3%, causing massive damage to shareholder returns.
