On October 26, 2021, after market hours, Cortexyme issued a press release “report[ing] top-line results from its Phase 2/3 GAIN Trial, a double-blind, placebo-controlled study evaluating the efficacy of atuzaginstat (COR388), an investigational orally administered small-molecule that targets gingipain proteases from the bacterium Porphyromonas gingivalis (P. gingivalis).” The press release reported, in relevant part, that the study had failed to meet statistical significance in its co-primary endpoints of improving cognitive and functional abilities in patients with mild-to-moderate Alzheimer’s disease. On this news, Cortexyme’s stock price fell $44.17 per share, or 76%, to close at $13.51 per share on October 27, 2021, damaging investors.
Then, on January 26, 2022, before market hours, Cortexyme disclosed receipt of a letter from the U.S. Food and Drug Administration (“FDA”) advising that the FDA had “plac[ed] a full clinical hold on atuzaginstat’s (COR388) Investigational New Drug application (IND 134303).” On this news, Cortexyme’s stock price fell $2.85 per share, or 31%, to close at $6.21 per share on January 26, 2022, further damaging investors.
On February 1, 2022, Cortexyme issued a press release announcing plans to reduce its workforce by 53% in response to the clinical hold. That same day, Cortexyme announced the resignations of Casey Lynch, the Company’s CEO and Chair of the Board, and Steve Dominy, the Company’s Chief Scientific Officer and a director. On this news, Cortexyme’s stock price fell $0.67 per share, or over 9.8%, to close at $6.16 per share on February 2, 2022, further damaging investors.
