Class action lawsuit claims imaging agent developer Telix Pharmaceuticals misled investors

Investors have filed a class action lawsuit against Telix Pharmaceuticals, claiming the Australia-based imaging agent developer made “false and misleading statements” about key aspects of its business. 

Plaintiffs first filed the complaint last month in a U.S. District Court for the Southern District of Indiana, with investors suffering “substantial losses as a result of the alleged securities fraud.” These purported transgressions took place between February and August, including the FDA rejecting Telix’s application for a new brain cancer imaging agent in April. 

Attorneys also highlighted news the U.S. Securities and Exchange Commission recently launched an investigation into its business practices. 

“We’re looking into whether the company knowingly misrepresented the foundational integrity of its drug development and manufacturing capabilities,” attorney Reed Kathrein, a partner with Hagens Berman, said in an announcement Dec. 10, with the Seattle-based law firm seeking individuals to participate in the class-action lawsuit. 

Attorneys claim  Telix management has “materially overstated” the developmental progress and commercial prospects of its prostate cancer therapeutic candidates (specifically TLX591 and TLX592). It also allegedly overstated the stability, quality and regulatory compliance of its third-party supply chain and manufacturing partners, a “crucial” piece of its regulatory applications with the FDA.

Hagens Berman highlighted two events that created investors’ concerns and “cratered” Telix’s stock price. The first drop occurred in July when the company disclosed the SEC subpoena, with regulators requesting various documents and info relating to the development of new prostate cancer products. Following this news, price of Telix’s stock fell by more than 13% over two trading sessions. Then in August, the “more severe blow” came when the company announced the FDA had unearthed concerns about Zircaix, its novel PET imaging agent geared toward kidney cancer. This after the agency had identified “deficiencies” tied to the product.

“These deficiencies, related to the quality and control processes at manufacturing facilities, directly contradicted the company's earlier assurances regarding its supply chain reliability,” attorneys charged, noting that Telix shares plummeted 21% over two trading sessions after the news. 

Plaintiff attorneys are seeking unspecified damages to be determined at a jury trial. Telix did not immediately respond to a Radiology Business request for comment on the complaint.