Christina Spicer  |  April 13, 2021

Category: Legal News

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Bellus Health Investors Misled, Claims New Class Action

A nationwide class action lawsuit has been filed in New York federal court claiming that Bellus Health (NASDAQ: BLU) duped its investors about the effectiveness of a drug it had in development. 

The lawsuit, lodged in New York federal court, claims deceptive statements in documents Bellus submitted to the Securities and Exchange Commission (SEC) resulted in artificially inflated stock prices. The plaintiffs say that Bellus stock took a 75 percent dive between June 29, 2020 and July 8, 2020 on the news that the drug it touted was not turning out to be as effective as it represented after clinical trials.  

The class action lawsuit alleges that Bellus made misleading claims about a drug it was developing to treat chronic cough, BLU-5937. Bellus reportedly claimed that the drug was superior to offerings by competitors. Specifically, the company claimed that the competing drug caused loss of taste in up to 80 percent of patients, while BLU-5937 only caused the issue in 5 percent.  

Allegedly, Bellus continued to tout the superiority and effectiveness of its drug between Sept. 5, 2019 through two clinical trial phases. The class action lawsuit claims that these representations induced investors to buy Bellus stock at inflated prices; however, when Bellus announced that the end of the drug’s Phase 2 trial did not demonstrate BLU-5937’s effectiveness over a placebo on July 6, 2020, the stock price plummeted.  

Indeed, Bellus stock was trading at $12.02 a share on June 29, 2020, but had dropped to $2.97 a share on July 8, 2020.  

The Bellus investor class action lawsuit accuses the company and its senior officers of making deceptive statements about the efficacy of the drug, garnering as much as $70 million through inflated stock prices.  

Bellus is not the only company to be sued for allegedly releasing misleading information that influenced stock prices. 3D Systems is the defendant in a class action lawsuit filed Friday which claims the company deceived investors. Last month, three lawsuits were filed against Bit Digital, Neptune, and Sequential Brands, claiming investors were duped by artificially inflated stock prices. 

Are you a Bellus Health investor? Are you concerned you may have been deceived? Tell us about your experience in the comment section below.  

The lead plaintiff will be represented by David Harrison and Christian Levis of Lowey Dannenberg P.C. 

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One thought on Bellus Health Investors Misled Claims New Class Action

  1. GAVIN DELANEY RIZZO says:

    I knew something was wrong with this. First stock i ever invested in. Bought in at jan 29 2020 sold june 3rd 2021.

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