ChemoCentryx ($CCXI) Investor Settlement

ChemoCentryx has agreed to a tentative settlement to resolve investor claims that it misled the market about avacopan, the ADVOCATE trial, and related FDA review issues.

Outline:

On November 25, 2019, ChemoCentryx announced positive ADVOCATE results and promoted avacopan as a safer steroid alternative. In June 2020, it raised $325 million while continuing to present FDA review as routine. On May 4 and May 6, 2021, FDA materials and an advisory committee meeting exposed concerns about the trial, steroid use, efficacy, and liver safety, sending $CCXI sharply lower. The case has now moved to a proposed settlement.

Timeline:

• November 25, 2019: ChemoCentryx announced positive topline results from the ADVOCATE trial, saying avacopan met key remission goals.

• March 19, 2020: The FDA privately met with ChemoCentryx and reiterated concerns about the interpretability and clinical meaning of the ADVOCATE results.

• June 15, 2020: ChemoCentryx completed its June 2020 offering and raised more than $325 million.

• November 9, 2020: ChemoCentryx told investors that interactions with the FDA had been straightforward and as expected.

• January 13, 2021: ChemoCentryx said the FDA had not highlighted any particular issue requiring an advisory committee discussion.

• May 4, 2021: The FDA released briefing materials ahead of the advisory committee meeting and disclosed serious concerns about ADVOCATE.

• May 6, 2021: The FDA held an advisory committee meeting that further exposed problems with the trial and its reported results.

• March 2026: The parties agreed to settle the lawsuit

Background:

ChemoCentryx was a biopharmaceutical company developing avacopan for ANCA-associated vasculitis, a rare autoimmune disease often treated with steroids and immunosuppressants. The company promoted avacopan as a safer alternative that could reduce or eliminate the need for chronic steroid use. Because ChemoCentryx had no approved drugs on the market, avacopan was central to the company’s business story.

The dispute centers on the ADVOCATE trial, which ChemoCentryx said showed that avacopan was effective, safer than steroid-based treatment, and capable of replacing steroids. Investors say that picture was overstated. According to the case, the FDA had repeatedly warned ChemoCentryx that the trial design and reported results did not adequately support those claims.

Investors also say ChemoCentryx failed to disclose that steroid use remained widespread in the avacopan arm, that key efficacy conclusions depended on departures from the trial’s prespecified rules, and that the drug showed troubling liver safety signals. Even so, the company continued promoting the trial and raised more than $325 million in June 2020 while the stock was elevated.

The market learned more on May 4 and May 6, 2021, when FDA briefing materials and the advisory committee meeting revealed the scope of the agency’s concerns. ChemoCentryx shares fell sharply as investors digested those disclosures. Later, on October 8, 2021, the FDA approved avacopan only with a narrower label as an adjunctive treatment and required liver warnings. The matter has now moved to a proposed settlement.

What Can Investors Expect Now?

ChemoCentryx has agreed to a tentative settlement to resolve investor claims that it misled the market about avacopan, the ADVOCATE trial, and related FDA review issues.