BrainStorm Cell Therapeutics Investors Advance FDA Feedback Suit

BrainStorm Cell Therapeutics Inc. must battle shareholder allegations it rosily touted FDA feedback on its stem-cell treatment’s clinical testing for a fatal neurodegenerative disease before failing to get approval.

Executives’ awareness of Food and Drug Administration feedback contradicting their public statements sufficiently bolstered an inference of recklessness for securities fraud claims, Judge Dale E. Ho said Monday. Investors adequately alleged the biopharmaceutical company misrepresented the regulator’s views imparted to it regarding the design of its clinical trials of a treatment for amyotrophic lateral sclerosis and a statistical effect on its results.

The investors also satisfactorily pleaded BrainStorm mischaracterized a subgroup ...