Tenax Therapeutics (TENX) Misrepresented TNX-103 Clinical Trial Efficacy and Phase 3 LEVEL Study Failure Case
$TENX investors filed a securities class action against Tenax Therapeutics, Inc., CEO Christopher T. Giordano, Chief Medical Officer Stuart Rich, and current and former CFOs for allegedly overstating the effectiveness of its lead drug candidate, TNX-103, misleading investors about the likelihood of success in its Phase 3 LEVEL clinical trial, and exaggerating the drug's clinical, regulatory, and commercial prospects.
On August 10, 2026, Tenax announced that its Phase 3 LEVEL clinical trial of TNX-103 failed to meet both its primary endpoint of improving six-minute walking distance and its key secondary endpoint measuring patient-reported symptoms. Following the announcement, $TENX plunged approximately 89.77%, or $12.06 per share, closing at $1.38.
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Case Details:
Tenax Therapeutics is a clinical-stage pharmaceutical company developing therapies for cardiopulmonary diseases. Its lead drug candidate, TNX-103 (oral levosimendan), was being developed to treat pulmonary hypertension associated with heart failure with preserved ejection fraction (PH-HFpEF), a serious condition with limited treatment options. The Company's development strategy centered on its Phase 3 LEVEL clinical trial, which evaluated whether TNX-103 could improve patients' exercise capacity and quality of life.
Throughout the Class Period, Tenax promoted TNX-103 as a promising treatment supported by favorable results from its earlier Phase 2 HELP study. The Company emphasized that levosimendan had previously been approved for other medical indications and characterized its clinical development approach as "derisked." Management repeatedly expressed confidence that the Phase 3 LEVEL trial would confirm the drug's effectiveness and support future regulatory approval.
On November 13, 2023, Tenax announced that the U.S. Food and Drug Administration (FDA) had cleared its Investigational New Drug application for TNX-103, allowing the Company to initiate its Phase 3 LEVEL study. Management highlighted the drug's potential to improve exercise capacity and pointed to positive findings from the earlier HELP study as evidence supporting the trial's design and expected results.
During 2024, Tenax continued promoting the drug's development prospects. On February 12, 2024, the Company completed a public offering that generated approximately $9 million in gross proceeds. On August 12, 2024, Tenax announced a private placement raising approximately $100 million to accelerate its Phase 3 development program. Management stated that the financing would support the LEVEL trial, preparations for a second Phase 3 study, and progress toward a potential regulatory submission.
On November 13, 2024, during the Guggenheim Healthcare Innovation Conference, Tenax executives reinforced expectations for the LEVEL trial's success. Management referenced the Phase 2 HELP study, which had demonstrated an approximately 29-meter improvement in six-minute walking distance, and suggested that similar results could support the drug's clinical effectiveness and regulatory prospects.
On March 5, 2025, Tenax announced that the FDA had completed its review of an updated Phase 3 development plan, including expanded enrollment intended to increase the LEVEL study's statistical power to more than 95%. The Company also outlined plans to advance its second Phase 3 study, LEVEL-2. Throughout 2025, management continued emphasizing the drug's promising clinical evidence, its supposedly reduced development risks, and the potential to establish TNX-103 as an effective treatment for PH-HFpEF.
On August 10, 2026, Tenax released topline results from the Phase 3 LEVEL clinical trial, revealing that TNX-103 had failed to achieve its primary endpoint of improving six-minute walking distance compared with placebo. The trial also failed its key secondary endpoint, which measured patient-reported symptoms using the Kansas City Cardiomyopathy Questionnaire. During a conference call, management acknowledged that it had not anticipated the impact of patients' disease severity on treatment response.
Following these disclosures, Tenax shares collapsed approximately 89.77%, falling $12.06 to close at $1.38 on August 10, 2026.
On August 11, 2026, several analysts significantly reduced their price targets for Tenax. Guggenheim Securities lowered its target from $40 to $4, while Chardan Research downgraded the stock from Buy to Neutral and reduced its target from $27 to $5. Evercore ISI also downgraded the Company from Outperform to In Line and lowered its target from $39 to $5, citing uncertainty surrounding the drug's development prospects following the failed trial.
Based on these events, $TENX investors filed a claim against Tenax Therapeutics, alleging the Company:
Materially overstated the effectiveness of TNX-103 and its potential to improve exercise capacity in patients with PH-HFpEF.
Misled investors about the likelihood of success in the Phase 3 LEVEL clinical trial by emphasizing favorable Phase 2 results without adequately reflecting the uncertainty surrounding the drug's efficacy.
Issued materially false and misleading statements regarding the Company's drug development progress, clinical expectations, and business prospects.
Investors argue that had the true effectiveness of TNX-103, the risks associated with its Phase 3 clinical development, and the uncertainty surrounding its regulatory and commercial prospects.