Athenex Investors’ Suit Should Be Tossed, Says Magistrate Judge

A suit accusing Athenex Inc. of securities fraud based on allegations that its leaders didn’t tell investors that data from drug trials would make Food and Drug Administration approval unlikely should be dismissed, a magistrate judge recommended.

After the FDA sent a letter stating it had concerns about patient safety and that the company’s application wasn’t ready for approval, Athenex’s stock dropped from $12.10 on Friday, Feb. 26, 2021, to $5.46 on Monday, March 1, 2021, when the company announced the FDA’s decision. This proposed securities class action was filed two days after.

• Investors said the company’s use of an ...