On July 13, 2020, NextCure, Inc. (NASDAQ: NXTC)shocked the markets when it announced that it no longer planned to advance the monotherapy trial for its lead product candidate, NC318, in non-small cell lung cancer and ovarian cancer. On the same day, NextCure announced the resignation of its Chief Medical Officer, Kevin N. Heller, M.D. On this news, the price of NextCure common stock plummeted over 54% in one day, closing at just $8.15 per share.
A lawsuit alleging violations of federal securities laws has been filed against NextCure and certain of its officers and directors. The suit alleges that beginning in November 2019, NextCure misled investors about the efficacy of and objective responses observed in patients treated with NC318in the Company’s Phase 1 clinical trial for non-small cell lung cancer and ovarian cancer. The lawsuit also alleges that NextCure used these misstatements to artificially prop up the price of its stock to support a November 19, 2019 public offering of $150 million of the Company’s common stock, at $36.75 per share. According to the lawsuit, the July 13, 2020 news that NextCure was no longer advancing the NC318 trial shocked the market because of the Company’s previous statements touting the positive results of NextCure’s Phase 1 trial for NC318.