Humanigen Settles Investor Suit Over Rejected Covid-19 Treatment

Humanigen Inc. will pay $3 million under an approved settlement to resolve allegations that the pharmaceutical company overhyped its drug’s ability to treat Covid-19.

Investors said Humanigen repeatedly promoted lenzilumab’s prospects as a Covid-19 treatment but “failed to disclose material adverse nonpublic information” over whether the drug would work. The investors sued in the US District Court for the District of New Jersey after Humanigen’s stock price dropped when the FDA rejected its application for an emergency use authorization, and when a clinical trial failed to show that lenzilumab was effective as a Covid-19 treatment.

The settlement covers investors who ...