A class action lawsuit was filed against Intellia Therapeutics Inc. (NTLA) by Levi & Korsinsky on February 11, 2025. The plaintiffs (shareholders) alleged that they bought NTLA stock at artificially inflated prices between July 30, 2024 and January 8, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Intellia Therapeutics stock during that period can click here to learn about joining the lawsuit.
Intellia is a clinical-stage biotechnology company, focused on developing CRISPR-based gene editing technologies for the treatment of cancer and autoimmune diseases.
The company’s claims about its Phase 1/2 study evaluating lead drug candidate, NTLA-3001, for the treatment of alpha-1 antitrypsin deficiency (AATD)-associated lung disease are at the heart of the current complaint.
Intellia Therapeutics’ Misleading Claims
According to the lawsuit, Intellia and two of its senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the demand for viral-based editing, and the viability of the NTLA-3001 program, from SEC filings and related material.
For instance, during the Class Period, the defendants reiterated their enthusiasm regarding NTLA-3001’s potential therapeutic use for treatment of AATD. Also, the company informed that it had received regulatory authorization to begin its first-in-human study of NTLA-3001 for people living with AATD. If proven effective, Intellia planned to use its modular gene insertion platform to address numerous diseases caused by a missing or defective protein.
Later, in a press release issued on August 8, 2024, Intellia stated that it expects to dose the first patient in the Phase 1/2 study of NTLA-3001 in the second half of 2024. Finally, on a November 7, 2024 earnings call, Intellia’s CSO (Chief Science Officer) mentioned that the company was on track to dose the first patient in the Phase 1/2 study of NTLA-3001 by the end of 2024. Notably, if the results would show a positive outcome in humans, as viewed earlier in the nonhuman primates, it would mark a major step forward for alpha-1 patients and the field of gene editing.
However, subsequent events (discussed below) revealed that the defendants knowingly misled investors about the potential outcome of the Phase 1/2 drug trial of NTLA-3001 and the related timeline for the drug’s commercialization.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the business and prospects during the Class Period. Importantly, the defendants are accused of misleading investors about the company’s expectations from the ongoing trial of its lead drug candidate, NTLA-3001.
The information became clear on January 9, 2025, when Intellia released a press release announcing a corporate restructuring. In the release, Intellia stated that it was discontinuing all research and studies related to NTLA-3001. What’s worse, the company announced a 27% reduction in its workforce in 2025. The management had decided to dedicate Intellia’s resources on other pharmaceutical development and implement cost saving measures by reducing work force. Following the news, NTLA stock plunged by 15.1% on January 9.
To conclude, the defendants allegedly misled investors by concealing that the demand for viral-based (gene-editing) therapies was declining because non-viral based methods were proving more cost effective and efficient. This had led to diminishing popularity of the NTLA-3001 program. In the past year, NTLA stock has lost 67.7%.
