Struggling biotech Allarity Therapeutics received notice from the Securities and Exchange Commission that the agency’s staff has recommended it take action against the company over alleged violations of federal securities laws.
The biotech has been handed a Wells notice, which is sent to companies at the conclusion of an SEC investigation to let them know that the SEC intends to bring an enforcement action against them, according to a Monday filing. The notice concerns meetings that Allarity had with the FDA over its NDA for the cancer drug dovitinib, which it licensed from Novartis.
Allarity added that all of the alleged misconduct happened before 2022 and that three of its former officers were also handed Wells notices “relating to the same conduct.”
However, Allarity is cooperating with the agency and “maintains that its actions were appropriate,” with plans to submit a formal response to the SEC, according to the filing.
Allarity first signed a licensing deal with Novartis for dovitinib in 2018, but the deal ended earlier this year due to lack of payment. The development of the drug has faced headwinds: Two years ago, the FDA told Allarity it would need to go back to the drawing board and do a new dosing study with dovitinib before a Phase 3 trial in metastatic renal cell carcinoma could begin. Allarity subsequently dropped the drug in that indication and said it would continue its development as a combination therapy with the PARP inhibitor stenoparib.
The biotech is still investigating stenoparib in a Phase 2 trial for advanced recurrent ovarian cancer. In June, the company said that the drug has shown clear clinical benefit and that it would stop enrollment in the trial to instead focus on a follow-on trial as part of the path toward approval.